People’s United Financial, Inc. Q4 2008 Earnings Call Transcript

Jan.23.09 | About: People's United (PBCT)

People’s United Financial, Inc. (NASDAQ:PBCT)

Q4 2008 Earnings Call

January 23, 2009 11:00 am ET

Executives

Philip Sherringham – President & CEO

Paul Burner - CFO

Analysts

Ken Zerbe – Morgan Stanley

Steven Alexopoulos – JPMorgan

Mark Fitzgibbon – Sandler O’Neill & Partners

Collyn Gilbert - Stifel Nicolaus

Matthew Kelley – Sterne Agee

Steve Moss – Janney Montgomery Scott

Damon DelMonte - KBW

Operator

Good day and welcome to the People’s United Financial fourth quarter earnings conference call. (Operator Instructions) I would now like to turn the call over to your host for today’s call, Mr. Philip Sherringham, President, and Chief Executive Officer of People’s United Financial.

Philip Sherringham

Good morning everyone and welcome to the fourth quarter 2008 earnings conference call of People’s United Financial. I am Philip Sherringham, President, and CEO and with me today is Paul Burner, our Chief Financial Officer, who will be taking you through the financials in some detail in a few minutes. And at the end of the call we’ll provide a brief overview of our outlook for 2009.

I’d like to start with a few comments about the past quarter and year. In the three months since our last call we all have continued to witness economic upheaval spreading beyond the banking and financial services sectors with growing impact on the auto retail sectors and the [job] market in general.

As a result our [inaudible] balance sheet and asset quality are, if anything, more distinctive then ever. At the same it bears noting that the significant asset sensitivity of our balance sheet which we have discussed in detail in the past puts pressure on our results particularly with interest rates at historic lows.

We recognize that the ongoing performance of the core bank as well as how effectively we ultimately deploy our excess capital are critical to our long-term value proposition. Stepping back to look at the full year it is clear that 2008 was in fact a year of significant evolution for People’s United.

From the close of the Chittenden acquisition on January 1 of last year, through the consolidation of the six charters into the People’s United Bank charter on January 1 of this year, we continued to consistently build our franchise into the premier New England based regional banking franchise.

Among our accomplishments in 2008 are the progress of Chittenden, growing strategic assets, maintaining asset quality, and having achieved the cost related objectives outlined in our April announcement.

Another positive development during the quarter was the inclusion of People’s United in the S&P 500 index. Additionally as you already know we did not avail ourselves of any top funds during the quarter nor do we anticipate doing so in the future.

Amongst other factors the relative value of the funds is limited for us due to our very strong excess capital position. As we said before we continue to weigh all of our options to determine the most attractive use of capital to deliver long-term shareholder value and at this time we still feel the best use of our capital is to have the patience to find and execute a well-priced acquisition that will enhance the long-term profitability of the company.

We do not feel under any pressure therefore to immediately deploy the excess capital in either a [poorly] priced deal or an aggressive stock buyback. However we’re very committed to our dividend and feel that it continues to be an appropriate avenue to enhance shareholder returns.

Before we begin I’d ask you to please be sure to read the important disclosure of statements on slide two at your convenience since as you know by now we are going to be making some forward-looking statements.

Now let’s move on to the highlights for the fourth quarter on slide three. Net income in the quarter was $35 million or $0.11 a share. Retail intangible assets was 76 basis points compared to 99 basis points last quarter. The margin in the fourth quarter was 3.55% down 16 basis points or 4% from the third quarter of this year and essentially flat to the second quarter.

This relative stability reflects our disciplined lending and deposit pricing which offset the continued decreases in interest rates. As I noted earlier the structural asset sensitivity of our core bank combined with the entirely asset sensitive excess capital position has an immediate impact on our net interest margins.

We will get into more detail on that later.

Net loan charge-offs for the quarter remained exceptionally low at 16 basis points of average loans on an annualized basis compared to 11 basis points in the third quarter. Given the economic circumstances we are pleased that our asset quality has held up so well and better then most of our peers.

We attribute this to our strong underwriting standards and while we don’t expect to be immune to macroeconomic factors we do expect to fair better then our peers in terms of asset quality. With that I’m pleased to hand it over to Paul Burner, to provide you with details on the quarter.

Paul Burner

Thank you Philip and good morning everyone. On slide four we’ll look in some detail at our average earning assets while total earning assets remained essentially flat from the third quarter of this year, we continued to grow commercial loans by $131 million or 6% on an annualized basis.

Excluding the shared national credits portfolio which is in run off mode the growth was $155 million or 8% annualized. Slide five highlights the consistent increase of the commercial portfolio as a percentage of total earning assets in the fourth quarter of 2008 compared to both the third quarter and the year ago quarter.

Home equity lines and loans are down 13% of the whole while residential mortgages are down to 18% as a result of our intentional run off of these loans and the lower proportion of mortgages in the former Chittenden portfolio.

Securities and investments continued to decline from the prior quarter and are down significantly from last year. The year-over-year decline is due to the liquidation of some of the investments to fund the Chittenden purchase. As we stated in the past we do not take any credit risk in our securities and short-term investment portfolios and as a result we have avoided the valuation declines that have so significantly affected other financial institutions.

Slide six provides a detailed break out of our commercial portfolio and its commercial real estate component. As expected our shared national credit portfolio balances declined to 7% of the commercial portfolio in the fourth quarter versus 8% in the third quarter. This reflects our decision to unwind this portfolio in an orderly fashion over the next few years and as we have in the past I would emphasize that our shared national credits portfolio has performed and continues to perform exceptionally well.

The commercial real estate portfolio which comprises just over half of the commercial total is well diversified as you can see and residential development loans represent only 15% of commercial real estate. Next on slide seven we break out our construction portfolio. At $125 million it represents less then 7% of our total loan portfolio and over 55% of the construction portfolio is in non-residential properties.

Within the shared national credits portfolio the three states with the largest concentrations are Washington, Florida, and New York. In Florida today represents only 4% of this portfolio or $36 million. Turning the page you can see asset quality trends in our commercial loan portfolio continued to be very stable.

Commercial net charge-offs remain low in this quarter at 14 basis points and overall commercial NPL’s continued to decline sequentially declining $4 million from the third quarter to $56.7 million. Our commercial real estate NPL’s declined to $29.8 million for the fourth quarter from $29.9 million in the third quarter and $31.9 million in Q2.

CNI NPL’s declined to $21.1 million in the fourth quarter from $23.9 million in the third quarter and $23.4 million in Q2. Finally PCLC our equipment financing business NPL’s declined to $5.8 million in the fourth quarter from $6.9 million in the third quarter and $6.4 million in the second quarter.

As we stated before we continue to see no systemic issues in our commercial portfolio. Slide nine provides detail on our $5.4 billion consumer portfolio which as you can see remains very strong with weighted average loan to value ratios of 50% for residential loans and 55% combined loan to value ratios for home equities.

Also note uniformly high FICO scores for both portfolios. We feel this underwriting discipline contributed to the low net charge-offs of $800,000 or 11 basis points annualized and $300,000 or seven basis points annualized for residential and home equity loans respectively.

Asset quality measures for consumer loans remained correspondingly strong for the quarter, non-accruals were likewise quite low at 77 basis points and 15 basis points for the residential and home equity portfolios respectively.

As you can see on slide 10 this isn’t a one-time event. We’ve had outstanding asset quality levels for quite some time now. I would note that the graph on the right includes home equity and indirect auto which accounts for the net charge-offs being higher then just the home equity stats on the prior slide.

Turning the page we move to the liability side of the balance sheet with a look at the average funding mix. As we’ve noted in previous quarters our loans are fully funded by deposits. This provides us with low cost funding, as you can see here. In fact our total deposit cost of 1.55% this quarter represented a decline of eight basis points from the third quarter of 2008.

Our total cost of funds had even greater improvement dropping 10 basis points to 1.63%. Turning the income statement on slide 12 you can see that net interest income was $153.3 million for the fourth quarter, down $6.5 million or 4% from the third quarter reflecting the impact of lower interest rates on income from our floating rate assets.

We’ll talk further about our asset sensitivity in later slides. We increased our provision for loan losses to $8.7 million in the fourth quarter which served to build our loan loss reserve allowance by $3 million to $157.5 million. We now have reserves equal to 187% of nonperforming loans.

Finally as I’ll talk about later on slide 15 we experienced an increase in non-interest expense in the fourth quarter compared to the third quarter largely as a result of one-time items in both quarters.

Slide 13 breaks out our net interest margin into two categories, one for the core bank at the well-capitalized level, and one for the excess capital that we are maintaining. In the fourth quarter the core bank margin was 3.94%, a decrease of five basis points from the third quarter but still up 14 basis points from the second quarter.

We were able to maintain the margin at this level despite being asset sensitive by maintaining disciplined pricing of both loans and deposits. As you can see however the completely asset sensitive excess capital, the yield on which declined 75 basis points in the quarter has a significant impact on the blended margin which decreased 16 basis points from the third quarter to 3.55% despite the only five basis point decrease in the core bank margin.

While we had said last quarter that we felt the margin troughed in the second quarter that did not anticipate the latest Fed Funds move. One [mitigant] is that at the end of December last year we purchased $370 million of agency hybrid [ARMs], the majority of which are Jennie Mae. We feel that such securities provide the optimal balance of credit risk, i.e. none, yield and duration. This also serves to offset the run off in our mortgage portfolio.

Next you can see that the non-interest income in the fourth quarter of $73.7 million was nearly flat to the $74.2 million in Q3. Within non-interest income weakness in wealth management fees, bank service charges, and merchant servicing income, was essentially offset by one-time gains from the sale of our mortgage servicing rights portfolio as well as the sale of two New Hampshire branches previously identified for closure.

So in the fourth quarter compared to the third quarter wealth management fees declined $1.7 million, bank service charges by $1.6 million and merchant servicing by $900,000. The one-time gains included the sale of the mortgage servicing rights portfolio for $2.6 million and the sale of the two branches for $1.4 million.

As you can see on slide 15 non-interest expense of $165.5 million was $6.8 million higher then the third quarter due to one-time items in both quarters. In the fourth quarter we recognized one-time expenses of $1.3 million associated with the sale of some of our downtown Bridgeport properties, and two branches in New Hampshire, and a $2 million charge associated with the dissolution of the banks advisory board.

These charges were partially offset by other favorable adjustments totaling $400,000. In the third quarter we benefited from approximately $3.5 million in one-time items, the majority of which related to the favorable resolution of an outstanding compensation and benefits matter.

On January 1 we completed the consolidation of the six northern New England bank charters under that of People’s United Bank as part of our focus on reducing complexity and risk while at the same time lowering costs.

The banks continue to operate as divisions of People’s United under their own names. So, slide 16 illustrates the trends in our efficiency ratio. The major driver of the increase in the fourth quarter’s to 69% has been the decline in revenue associated with a decrease in interest rates due to our asset sensitive balance sheet. To illustrate the point, when we do a pro forma of the efficiency ratio assuming a Fed Funds rate of 5%, the efficiency ratio drops to 57.5%.

In addition to helping this ratio an increase in interest rates will be a significant earnings growth driver. As disclosed in the Q3 10-Q each 1% change in rates impacts pre-tax income by approximately $50 million.

Now I’ll hand it back to Philip to provide a high-level outlook for 2009 and to wrap up.

Philip Sherringham

Thank you Paul, while we don’t provide earnings guidance we’d like to spend a few minutes talking about some of the major drivers that will influence 2009. The most important of these is the interest rate environments.

As you know our asset sensitive balance sheet is more then just our excess capital. In fact as Paul mentioned a 1% increase in interest rates translates to $50 million improvement in pre-tax income. Conversely if you annualize the current 25 basis point Fed Funds rate compared to the [210] average experienced in 2008 that translates into 185 basis points or approximately $90 million reduction in pre-tax income.

I also want to point out that we have the flexibility to purchase additional agency hybrid ARMs which could have a significant positive impact on our margin income this year if we feel it is warranted. As for credit loss expectations we continue to feel we have a high quality loan book and do not currently see any systemic issues in the portfolio.

However, given the current depressed state of the economy we also don’t feel we will necessarily be permanently immune from asset quality issues. While our full year 2008 charge-offs were flat compared to 2007 at an amazingly low 10 basis points, fourth quarter net charge-offs were 16 basis points.

We feel charge-offs in 2009 will look more like the fourth quarter rather then the full year 2008. Loan growth remains principally driven by commercial lending. We expect to see 6% to 10% commercial loan growth partially funded and offset by paydowns in residential mortgages.

Fee income is another area that will likely reflect the broader economic environment and to that point we expect growth in fee income for 2009 to be in the low single-digits. Regarding non-interest expenses, starting from the operating base of $163 million in the fourth quarter of 2008 we’re facing a number of headwinds.

Those include an increase in our FDIC insurance premiums that effects all banks, core systems conversion expenses, normal compensation and benefit increases, and a volume related cost increases from certain fee income businesses. However we are working to offset these cost increases by looking for efficiencies to other franchises.

In fact we have identified an additional $25 million in annualized expense reductions. Netting these two factors against each other we generally expect 15 to 2% annualized expense increases from current levels in 2009.

That concludes our presentation and now we’ll be happy to answer any questions you may have.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Ken Zerbe – Morgan Stanley

Ken Zerbe – Morgan Stanley

In terms of acquisitions one of the things I recall you discussing is sort of a view towards finding a more commercial oriented acquisition to enhance value. Would you consider purchasing a company that has slightly more or greatly more residential mortgage or home equity exposure if you can still drive the same amount of value out of that acquisition?

Philip Sherringham

That’s a big if, but if we buy that assumption the answer is certainly, yes we would consider it. Consider it means we’ll look at it carefully, doesn’t mean we’ll necessarily go for it. Our preference remains to find a commercially oriented franchise.

Ken Zerbe – Morgan Stanley

I think you addressed this, could you just talk about the potential for deterioration in your leasing business. I know its holding up pretty well but it seems that that’s probably one of the most directly correlated businesses to overall economic environment, the economy is deteriorating pretty rapidly.

Philip Sherringham

Yes it is and on the surface you’re right, there could be an area of concern however obviously our performance to date doesn’t give rise to any concern in this area and we’re still pretty satisfied with the way things are evolving. I’d also like to point out that one of our strengths is our ability if we have problems to basically turn it around quickly.

The type of equipment that we lend on is basically plain vanilla equipment that has a very good value in the market in general if you will. It’s the type of equipment, printing presses, heavy-duty trucks, stuff like that that you can actually turn around and sell pretty quickly and we’ve been very good at doing this.

So I think overall I can’t really say we’re concerned there. We’re still watching it.

Ken Zerbe – Morgan Stanley

In terms of NIM, slide 13 in your presentation showed the excess capital down at 1.25 are we right to assume that that’s entirely invested in Fed Funds and if so should we be looking or expecting for say another 100 basis point drop in the return on the excess capital in the first quarter?

Philip Sherringham

I think its not all in Fed Funds, it’s a combination of Fed Funds and agency notes, very short-term agency notes that yield at least so far a bit higher then Fed Funds. However unless indeed we end up purchasing additional hybrid agencies or something like that, we think its warranted, you could expect further drops on that particular portfolio, yes.

Operator

Your next question comes from the line of Steven Alexopoulos – JPMorgan

Steven Alexopoulos – JPMorgan

I thought you said that you bought around $370 million of the agencies, but when we look at the balance sheet it looks like securities are up by about $1.5 billion this quarter, and the cash line is down, it looks like you moved more of a capital—

Philip Sherringham

That’s a function of some of those funds being invested in up to 90-day agencies. That pushes them into the securities category as opposed to short-term investments. But the 90 days is the maximum duration if you will. They’re still very short-term basically.

Steven Alexopoulos – JPMorgan

I’m curious when you look at the loan portfolio are you seeing any incremental pressure on the part of your franchise that’s towards the New York City area where we’re seeing quite a bit of fallout in terms of the economy.

Philip Sherringham

Look we haven’t obviously seen much of it so far. It’s a good question though because of course you’d expect [inaudible] accounting in particular which some of [inaudible] a suburb of New York City, to be subject to issue there. We have scanned our portfolio analyzed it very carefully to see what exposure we had with borrowers that are employed or at least listed as employees, the major usual suspects, AIG, Lehman, etc. and we’ve come up with a fairly small amount.

I think somewhere in the $126 million, and of that $126 million and remember our mortgage portfolio is still about $3 billion plus, the only delinquency we have are essentially two loans that are 30 days delinquent and the amount of about $2.5 million. Frankly typically those would probably cure themselves and if they don’t I’d remind you that our loan to value ratio is extremely low and we’re not going to have any losses there at all anyway.

Steven Alexopoulos – JPMorgan

Back to acquisitions, you had said you’re targeted geography was Maine to DC area, I’m curious with the two largest franchises in the DC area now going away through acquisition any change to your outlook of where you might look at deals?

Philip Sherringham

Obviously I’m not going to get specific here, but let’s just say that we still feel that the Maine to DC area offers some good options for us frankly.

Operator

Your next question comes from the line of Mark Fitzgibbon – Sandler O’Neill & Partners

Mark Fitzgibbon – Sandler O’Neill & Partners

I was wondering, in the release you mentioned that you had about 22% annualized growth in the home equity book, could you give us a sense for how much the home equity utilization rates have changed during the quarter?

Philip Sherringham

Actually on average this year, the past year, they’re down to about 35%. Historically it used to be more around 50% so utilization actually dropped in our portfolio.

Mark Fitzgibbon – Sandler O’Neill & Partners

I know you just mentioned you had about 25, I think you identified some additional cost savings, but I wondered if you could update us on the Chittenden synergies, where we are on that and what we should expect in the coming quarters for synergies out of that deal?

Philip Sherringham

Well we just mentioned of course we would have had additional $25 million on savings, those sort of across the board. The Chittenden synergies are being realized progressively and candidly as we finish or complete our core systems conversion which won’t be before the first quarter of 2010 at this point probably, then you’ll see some more synergies coming.

Mark Fitzgibbon – Sandler O’Neill & Partners

On the acquisition front, would you say that you’re seeing more transactions presented to you today then you have in the past or more companies beginning to hit that wall, is the flow of deals increasing?

Philip Sherringham

Yes.

Operator

Your next question comes from the line of Collyn Gilbert - Stifel Nicolaus

Collyn Gilbert - Stifel Nicolaus

Just as a follow-up to the expense question, I think I need clarity on that, so you had said looking at a base this quarter of $163 million and then looking at a 1% to 2% growth rate on that, should we annualize that 163 and then take a 1% to 2% growth on top of the annualized number?

Philip Sherringham

Yes.

Collyn Gilbert - Stifel Nicolaus

A lot of these banks, some of the stronger performers and obviously you are in that camp, talk about underwriting discipline and underwriting strength, can you just give a bit more color as to what it is about your underwriting that makes you better, not just on the application of the loan but also in terms of how your lenders are managing their portfolios to sort of be able to assess future risk or losses or just a bit more color, and I’m speaking primarily on the commercial side, commercial real estate too.

Philip Sherringham

As I said, the proof is in the pudding obviously. I think we’ve had a very consistent and strong underwriting culture at the bank for a number of years. I think there’s been consistency in approach, consistency in personnel, and all that is basically what makes it happen. Banks often talk about modifying their underwriting [inaudible] depending on the circumstances and the environment.

We basically don’t do this. We haven’t tightened, we haven’t loosened, we have a well-defined concept of what makes a good loan. We’re very cash flow focused of course being commercial lenders and at the end of the day you can see the results. There is no magic, that’s just generally, a lot of this stuff comes down to a certain amount of common sense.

You could broaden this debate and ask yourself why we’re in the mess we’re in in general. Its because people lost track of common sense in my mind. But we’re balanced in our approach to the business, in our funding approach, in our lending approach and you can see the results.

Collyn Gilbert - Stifel Nicolaus

On the CRE, you break it down in terms of geography but just curious about the direct, if you have any, direct office exposure in New York City.

Philip Sherringham

We have some but its limited. This would be primarily to our shared national credit portfolio.

Operator

Your next question comes from the line of Matthew Kelley – Sterne Agee

Matthew Kelley – Sterne Agee

The question on the capital account, that was a pretty big swing, and the accumulated other comprehensive income $60 million, I assume that was due to some type of a pension adjustment, can you give us a little detail there and comment on if we should be looking for any additional capital hits there.

Philip Sherringham

I think first of all you’re right, its all due to the pension fund. As you know changes in those pension plan valuations come through the OCI line. That’s not specific to us, its probably a worldwide phenomenon given what’s happened to the stock market in general.

In a nutshell that’s what happened there. We were significantly, dramatically over funded prior to the market kind of collapsing here and even though after that collapse we remained actually over funded. So whether you’ll see some more of this is entirely a function of two things as you might imagine, one being the course of the equity markets as well as the bond market obviously. And also of course what happens to interest rates.

We’ve had two negatives here, the market collapsing on the one hand and then as discount rates dropped the present value of the obligation of the pension funds goes in the other direction. That’s what explains if you will what happened here.

Matthew Kelley – Sterne Agee

The plan assets, how does it break down now between equities and fixed income?

Philip Sherringham

It varies. I don’t have this on the top of my head, I can get back to you on that.

Matthew Kelley – Sterne Agee

On your $240 million of life insurance assets, bank owned life insurance, is that separate account of general account?

Philip Sherringham

Its separate accounts.

Matthew Kelley – Sterne Agee

And within the separate account what types of investments do you have?

Philip Sherringham

We have two asset managers, the largest one I think is [Pimco] and I forget at the top [Smith Breedon] I think is the other one. The ratio there is about 70%-30% if I recall. And basically they invest in longer duration fixed income securities. As you know that type of investment, the yield on that type of investment, is primarily tax driven and its been a pretty successful investment for us so far.

Obviously we’ve lost some in the recent market downturn but we remain pretty comfortable with that investment actually.

Matthew Kelley – Sterne Agee

Are there non-agency type assets in those investment accounts?

Philip Sherringham

I’m sorry, I don’t have a list of all the investments there.

Matthew Kelley – Sterne Agee

Is there a stable value [wrap] associated with that to protect you if one of those investments—

Philip Sherringham

Yes, there is a stable value [wrap] associated with that.

Matthew Kelley – Sterne Agee

Could you comment on the commercial real estate exposure in Fairfield County, presumably vacancy rates are already pretty high but about to go a lot higher particularly with the financial services fallout, hedge fund fallout—

Philip Sherringham

We don’t have much exposure to commercial real estate in Fairfield County. Fairfield County is mostly residential exposure for us candidly.

Operator

Your next question comes from the line of Steve Moss – Janney Montgomery Scott

Steve Moss – Janney Montgomery Scott

With regard to the commercial loan growth during the quarter did it come from any particular region?

Philip Sherringham

No. Its pretty much across the board, I would say this, in general the southern part of the franchise, Connecticut and New York, have done relatively better in 2008 in terms of loan growth. I think northern New England, Vermont, New Hampshire if you will, are growing much more slowly which is to be expected.

Operator

Your next question comes from the line of Damon DelMonte - KBW

Damon DelMonte - KBW

Just to follow-up on the commercial loan growth, looking out into 2009 you are looking for around 6% to 10% growth, in what categories are you seeing the opportunities and also geographically speaking what areas are you seeing that.

Philip Sherringham

In terms of percentage growth the largest part is expected to be in the equipment-financing subsidiary, PCLC. Of course we’re monitoring this very carefully given the concerns potentially on the asset quality front but in terms of our planning if you will, that’s where a lot of growth is supposed to happen.

Commercial real estate and CNI are also expected to pick up and make their share of contribution if you will. Remember this is a pretty good environment for us with many banks having had to retrench, we’re seeing better deal flows and we’re seeing increasing spreads so that’s a very positive environment for lending for us.

Damon DelMonte - KBW

The PCLC business, that’s more of a national presence, is that correct?

Philip Sherringham

That is a national business correct.

Damon DelMonte - KBW

I think Paul was talking about expense items this quarter that were in the other non-interest expense category, could you recap some of those items that may not be included in the coming quarters?

Philip Sherringham

The basic message I guess if you want to address the detail, is that the delta if you will between third quarter and fourth quarter non-interest expense, other interest expense is due entirely to one-time factors that benefited us in the third quarter and therefore reduced expenses in the third quarter and went against us in the fourth quarter.

So in the third quarter as we pointed out we had the benefit of the resolution of certain HR issues were favorable if you will, and that was helpful, and didn’t reoccur of course in the fourth quarter and in the fourth quarter as we pointed out we sold a significant amount of our downtown Bridgeport properties.

Historically given the fact that we are headquartered here we used to own a significant amount of downtown Bridgeport, we sold some of that off if you will and so that had expenses which won’t reoccur. And then there was the, we dissolved an advisory board and accelerated some vesting of stock that was due to those board members.

And again what that will do is basically reduce our expenses going forward obviously.

Operator

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Philip Sherringham

Thank you very much, we’ll see you all in April.

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