First State Bancorporation (OTC:FSNM) Q2 2008 Earnings Call July 24, 2008 10:00 AM ET
Chris Spencer - Senior Vice President and Chief Financial Officer
H. Patrick Dee - Executive Vice President and Chief Operating Officer
Mike Stanford - President and Chief Executive Officer
Peyton Green - FTN Midwest Securities Corp.
Bradley Vander Ploeg - Raymond James Financial Inc.
Welcome to the First State Bancorporation second quarter earnings conference call. (Operator's instructions) I would like to turn today’s conference over to Chris Spencer, Chief Financial Officer.
I just want to let you know that First Sate Bancorporation will provide an online simulcast of this call on our website at www.fcbnm.com. An online replay will follow immediately after the call and continue for ten days. There will also be a replay of this call for ten days at the toll-free number 866-357-4211.
Your host and conference leaders for this call this morning are myself, Christopher C. Spencer, Senior Vice President and Chief Financial Officer, Michael R, Stanford, President and Chief Executive Officer, H. Patrick Dee, Executive Vice President and Chief Operating Officer; and Pam Smith, Chief Credit Officer of First State Bancorporation.
The Board of Directors of First State Bancorporation has adopted a policy that the company will comply with Securities and Exchange Commission Regulation FD in all respects. Consequently, this conference call will proceed under an agenda, which I will announce momentarily. Matters outside the agenda items will not be discussed. The subject matter of this conference call will include forward-looking statements. These statements are not historical facts and involve risks and uncertainties that could cause First State’s results to differ materially from those contained in such statements.
Our Agenda this morning will start off with Pat Dee making some overview comments for the quarter. I will then proceed to deal with some of the financial slides that are available on our website currently and we will open up the call for questions from our analysts.
With that, I will turn it over to Pat Dee.
Our second quarter results included outstanding loan growth of $119 million solid deposits growth of $66 million, a goodwill impairment charge of $127.4 million, and a provision for loan losses of $28.7 million. The evaluation of goodwill impairment is a very subjective process and it appears that the industry norm is to rely very heavily on the current market price of the company’s stock as the best indicator of that company’s value. In large part, because of the substantial short interest that has been accumulated in our stock, our market value recently has been substantially below our tangible book value. We certainly believe that the true value of our franchise is substantially higher than what the market is currently indicating. Although various assumptions could support a different position, we have been somewhat conservative in choosing to recognize a full impairment of goodwill during the current quarter. Although most of our shareholder base is very knowledgeable about goodwill impairment, we want to point out to the most sophisticated investor that this impairment has no real economic substance and in no way changes the inherent value of our company.
And now we will spend a few minutes talking about our operating results. Our net interest margin for the quarter was 2.96% down from 4.12% in the first quarter. The last fed rate decrease in late April had some effect along with the increase in our non-performing loans. Our up set any further rate decreases, we would expect our net interest margin to likely stabilize in a range of 3.85% to 3.95%. Our non-interest expenses, excluding the goodwill impairment charge, decreased slightly from the first quarter of this year as we continue to look for opportunities to reduce our expenses. That decrease was in spite of an increase in OREO expenses of $644,000 from the first quarter. Non-interest income increased by $710,000, from the first quarter, resulting primarily from an increase in our service charge income. Similar to our non-interest expense control efforts, we have implemented certain changes to improve our non-interest income and continue to look for additional opportunities to improve our performance in this category. Asset quality continues to be a challenge and as we saw an increase in our non-performing assets during the quarter from about $67 million to just under $90 million. Of that increase, $14.4 million resulted from a customer on the Denver area who is a homebuilder and land developer. Although this company is still making interest payments on the debt and are not yet 90 days past due, we have moved them to a non-performing status because of potential problems that we believe they may have in continuing to service their debt. We recently had all of the collateral for this relationship reappraised and have an overall loan devalue of approximately 77%. Another increase in non-performing asset during the quarter came from our Salt Lake City homebuilder whose total relationship is about $6.7 million.
Sales for that customer are low, but we believe that we are still fairly well protected by the collateral securing that relationship. We continue to see good movement in reducing certain non-performing loans as very steady or are at somewhat slow sales activity in each of our markets. We have increased our allowance for loan losses from 1.33% on loans at March 31 to 2.17% as of the end of this second quarter. Our charge-offs increased but for the first half of the year, totaled only about 40 basis points of average loans on an annualized basis. We will expect charge-offs in the second half of the year to continue at about that same rate.
Our slideshow will give a breakdown of our non-performing loans by general loan category and also by state. Our non-performing loans totaled just under $74 million and we now have specific reserves on those loans with about $5.4 million. We recently completed our safety and soundness examination and the regulators have only very minor differences in grading individual loans. So we believe that our problem loan identification process continues to be very sound. Despite our nominal level of charge-offs during the quarter and the relatively small amount of potential loss that we have recognized in our specific reserves, we decided to increase our allowance for loan losses based on the overall level of our non-performing loans and general economic problems rather than currently identified loss exposure in individual credits.
Our allowance for loan losses now includes about $21 million that is not included in our regulatory capital calculation. We believe that this positioned us to be more aggressive than we have been in taking write-downs or charge-offs in our problem loan portfolio. That should give us more flexibility going forward. We have continued to add to our special assets area with the addition of one of our most seasoned lenders in the Albuquerque market, Bill Boland, to manage that effort for us.
Bill has extensive expertise in construction and land development lending and has led through a previous down cycles such as the one we saw in the 1980’s which was much more extreme than our current situation. We believe that Bill's experience will serve him well in the years ahead with the task we have given him.
Our full year portfolio include $8.3 million carrying value of former bank premises or land acquired for future branch sites including $4.2 million carrying value of the Heritage place property. We do have one piece in Albuquerque valued at $1.7 million that is now under contract to sell with the closing currently scheduled for September of this year.
As we announced earlier this month, we will be closing our two Utah branches effective October 31, of this year. We have never achieved any real traction in deposit growth from that market and we believe that our capital is best allocated to our other markets that have a better balance between loan and deposit growth. Earlier this week, we opened the new branch in Las Cruces, New Mexico in a very good location near New Mexico State University. Las Cruces continues to be a very healthy and growing community and we believe that it affords an outstanding opportunity for future growth.
Capital management is critical to our organization of this time as it is for most banks. Although we reluctantly suspended our cash dividend at this time we believe that it is just one important piece of our overall plan to preclude any need to raise additional capital. But currently our regulators are not asking us to raise additional capital although we are working on a detailed capital plan to demonstrate how we can increase our total risk based capital ratio in the quarters ahead. We believe that by shuttering our Utah operations and being more selective about loan opportunities in our other markets that we can show significant increases in our capital ratios going forward. We believe that there are no viable opportunities at the present time to add additional capital in a form that makes economic sense for our company and our shareholders so we are taking these various steps to preclude any need to do so.
Now, Chris will run through some of the details on our results for the second quarter and then I will come back and summarize a few thoughts.
Thanks Pat. For those of you that have the slides available, I will go through this slide with you and hopefully without being done and I think Pat, the first slide is the second quarter summary. I think Pat has covered most of those bulks fairly well. Going on to the next slide, depicting our total assets at June 30, as you can see, it is fairly flat. We ended at $3.464 billion. We had very good loan growth which Pat indicated and you will see in the next slide that it is primarily offset with the write up and the goodwill keeping us flat with total footings from quarter-to-quarter.
Our total loans, as Pat had indicated, which tremendous loan growth in the second quarter throughout our footprint increasing total loans $119 million. On a go forward basis, we anticipate staying pretty flat in the third quarter and also anticipate decline in our total loan footings in the fourth quarter. This stems partially from our decision to close the Utah operations and as we look to manage capital, possibly shrink the balance sheet a little bit, we maybe looking at selling some participation during that timeframe as well as to actually reduce the total loan portfolio in the fourth quarter.
Total deposits, we had a very good quarter for deposits better than many quarters in the past. We increased in total deposits just over $66 million from third quarter to fourth quarter. Again, much like the loan book, we increased deposits throughout the footprint in each state. It also notes that since December 31, we have increased deposits a total of $72 million and we had also during this time had some broker deposits at December 31. We had $50 million in broker deposits within our totals, $30 million of that has run off in the first six months and we have not reinvested that in broker deposits because of the higher rates. So if you actually look at our relationship deposit growth, we have $30 million back and we really grown kind of organic relationship deposits just over $100 million. So, we are very pleased with the deposit growth in the quarter. Now going to the next slide as well, taking a look at the non-interest-bearing deposits, a big part of the overall deposit growth in the quarter and from non-interest-bearing deposits with an increase quarter-over-quarter of about $55.5 million. So, clearly, we are really pleased with that as well because of the net interest margin. And those non-interest-bearing deposits again grew over the entire footprint, each state showing the increase in the non-interest bearing.
The quarterly net operating income before the slide and a couple of these slides, make sure to note that we have excluded the goodwill impairment write-off to help be a little more comparative from that kind of one time extraordinary event. But as you can see for the quarter we had a net operating loss of $10.8 million driven primarily and significantly by the large provision in the quarter. Getting down in some of the details as far as non-interest income there were really no real significant items in the quarter and non-interest income, I think Pat alluded to the fact that we are continuing to see some good luck in our service charge income based on some steps that we have taken previously.
Our mortgage division continuous to see good activity, it is lower than it has been in the last year and given the nationwide slowdown, it continues to be a little slower but it is still contributing nicely to our non-interest income. In non-interest expenses, one of the big drivers obviously, there is selling some benefits that are remaining very stable in the second quarter. It was actually down from the first quarter as we continue to see some benefits from steps that we have taken in the past. We really know individual significant items there. Our occupancy expense is up just a little bit that includes a $200,000 write down on some excess administrative space here in Albuquerque but we are continuing to look to sub lease and give them the current market rates on space we took a write down of $200,000 that is an occupancy expense in the quarter. One of the bigger areas of increase in non-interest expense in the quarter is in OREO expenses and again Pat touched on that as well. We had about $250,000 in losses on three individual homes that were sold with total value of $1.9 million.
We also further wrote down a lot inventory up in Colorado that we have talked about previously that we have under contract with the National Home Builder that is taking down lots overtime but it did not call value for sales accounting and so it remains in OREO and they have come back and we negotiated a lower price on those remaining 89 lots and we took a write down of those of $623,000 in the quarter as well. One other real small piece in OREO, we wrote down a piece of excess land that we have here in Albuquerque that we have now under contract to sell and this is one of our bank premises pieces of land that we one time we are going to build on and decided not to. We have that piece of land under contract now and took a $95,000 write down primarily for closing cost and we anticipate that closing in the third quarter in the next period at about $1.7 million in other real estate right now.
We want to go to the next slide. The net interest margin, as Pat indicated in his comments, our margin for the quarter was 3.96, down 16 basis points from 4.12 in the first quarter. We saw a compression in the second quarter primarily from the last fed rate cut at the end of April. We think now, by the end of June, we kind of work through most of the impact of that and going forward, as Pat said, we forecast without any other rate activity or any insignificant non accrual loan activity that would be pretty stable about the 3.9 and the 3.95 range going forward. Our ROE and ROA obviously significantly distorted by the large provision for loan loss. Again, this takes out the goodwill write off that with the large provision that we took in the quarter obviously that ROA and ROE are significantly distorted.
Our operating efficiency ratio on the next slide for the quarter taking out again the goodwill write off to give a more comparable number would be 72.64% down slightly from the second quarter and we are continuing to see improvement in the expense area as well as I mentioned before a little bit of lift in the non-interest income which has helped a little bit in the quarter. We anticipate that we will be able to continue to bring this down slightly. We have got some other initiatives that we continue to work on that we think will help recover the expenses slightly as well as some things that we will continue to increase non-interest income primarily in the service charge area. I think it is kind of interesting to note that obviously we have been impacted significantly in the efficiency ratio about the net interest margin and if we have the same interest margin this time that we have last year at 4.66, the efficiency ratio would be there around the 62% range. So, we really feel good about the steps that we have taken on the non-interest expense and non-interest income side that non-interest margin is a big headwind to overcome but we do anticipate being able to improve on this number slightly over the next couple of quarters.
Pat touched on this pretty well. The total non-performing assets at the end of the quarter were just under $90 million which equates to 2.58% of the total assets. In that component that ORE has come down just under a million dollars at no real significant additions to ORE in the period there were as I mentioned relative to the losses that we took in a few sales. We have several small properties come out of that. We do have that excess land under contract for sale for $1.7 million. And again 50% of the ORE continues to be related to our excess buildings and land not loan related activity.
The breakdown of non-performing loans, it is continuous to be very similar to the same slide we showed to you in the last period. Again, Pat indicated that the $23 million increase in our non-performing loans in the last quarter are primarily from two properties in the real estate construction arena in Colorado and Utah and that is the big movement in this quarter. You can see the real estate construction in Colorado the last quarter was $13.3 million, it is now $26.8 million because of that one relationship of $14 million and again in Utah the construction number last quarter was $4.8 million now it is $11.8 million driven by that $6.7 million relationship there. Absent debt – the breakdown by state and by type is very similar to what it was the last quarter and we still continue to have no non-performing loans in our Arizona market.
Going a little bit deeper now to the construction portfolio itself a very modest increase in our overall construction loan portfolio of the quarter just $4.4 million. Again the dispersion of the portfolio by state and type of loan is almost identical to what it has been really changed there. Again, we think it is significant to note that over 50% of our construction portfolio continues to be in our New Mexico market which has been probably our most stable real estate market. So, clearly, we continue to have issues out of the construction portfolio which is responsible for the larger part of our non-performing loans but we continue to feel fairly good about the underlying collateral real estate values in each of our markets.
Our delinquent loans are actually decreased slightly from the first quarter and about approximately 50% of our delinquent loans continue to be driven by the construction portfolio but it was glad to see that delinquencies have turned down slightly. The allowance, we ended up at right under $59 million at the end of June and as Pat had alluded to relative to the specifics. We have only identified about $5 million in specific reserves of our non-performing loans and over 60% of our allowance at June 30 is related to really very subjective type of factors and not specifically identified problems. Our allowance at June 30 also represents 80% of our total non-performing loans.
Net charge-offs were $4.2 million in the second quarter, up significantly from the first quarter. For year-to-date, as Pat indicated earlier was 20 basis points on our total loan portfolio. We do think that the second quarter charge-offs was somewhat of an aberration in that for the year. The annualized number would be closer to the first half of 20 basis points and to annualize, we think more at 40 basis points on the year for 2008.
The provision in the quarter obviously is the huge number of $28.7 million that is clearly towards anything that we have had anywhere in the recent history by multiple of 10 to 20. We clearly think this is pretty much a one time event and that going forward, the next few quarters will get back something more normal as depicted here.
With that, Pat will have a few more comments and then we will open it up for questions from the analysts.
With the adjustments that we have made to our balance sheet in the second quarter of the year and we are pleased to report that we remain well capitalized under the regulatory definition at both our bank and our holding company levels. Through a more controlled growth and reduction in the loans previously originated from our Utah operations, we believe that we can improve our capital ratios above their current well-capitalized levels. We have aggressively added to allowance for loan losses and we will continue to push forward in managing and eliminating our problem and potential problem assets. We believe that the market will recognize our goodwill impairment for what it is, an accounting entry with virtually no economic substance.
We also believe that we are very well positioned to return the levels of reasonable profitability in the quarters ahead and we anticipate that we will finish the year well positioned for much improved results in 2009. The economy in most of our footprint is generally better than the country as a whole as evidenced by lower than average unemployment rates, steady job growth and general economic activity. We are especially encouraged in the Albuquerque area by the expected 5000 or so jobs that will be added over the next several years by companies such as Fidelity, Shot Glass Company, Hewlett Packard, Eclipse Aviation, and others. Our management team is extremely capable and is focused on the tasks at hand but we understand the issues facing us today. We have a plan to work our way through those kinds of challenges and we believe that we will return to solid financial performance within the next few years.
With that, we will go ahead and open it up for questions.
(Operator Instructions). And our first question comes from Peyton Green with FTN Midwest Securities.
Peyton Green - FTN Midwest Securities Corp.
I was wondering if you have been talking about the migration in the NPAs and what your expectation is over the balance of the year and then you are seeing any particular change in the credit grade levels from not so worried about to be far more worried about. Thank you.
Peyton, I think if we look back at the first two quarters of the year then we think fairly aggressive in trying to identify problems and any potential problem loans and have increased our watch list and so we have seen a pretty steady migration or drift from the less of their categories towards the more severe lines. I think the most encouraging figure that we saw on the second quarter was that almost the entire increase in the non-performing, the net increase was explained by the two large problem credits that we referred to.
The good news there is that there are only two of them; the bad news obviously is that they represent significant dollars. The encouraging part of that is that the larger of those two relationships based on current appraisals is still fairly well collateralized although we did established a small specific reserve on part of that relationship where we think the collateral values might not give us full protection against the loans involved. I will not say that we are seeing a big slowdown in the recognition of problem credits at this point but we do believe that it is moderating and the movement earlier in the year in particular we saw more the movement almost straight from paths upgrading to substandard and some cases very quickly into a non-performing status.
Our lenders right now are being charged with focusing almost entirely on cleaning up their existing portfolio and helping us even more with our problem identification. As I mentioned, the Federal Reserve and the State of New Mexico and their safety and soundness review had very little disagreement with us on our grading process. So, we think we have got a good handle on that. The other thing that is encouraging is that although there is some continued weakness in certain parts of our economies by and large, we have a fairly stable situation relative to real estate values in most areas of our footprint. There are some isolated pockets where our housing prices are continuing to drop but overall, for example for the Albuquerque metro area, the average in medium housing prices were housing sold in the month of May of this year were actually up a little bit from May in the previous year. So, we feel like we do have a little bit of a fluid situation here but the leading indicators including our delinquency rates tell us that the migration process have seem to be slowing down and we think it could slow significantly over the year.
One of the things I had alluded to when we talked about the Utah piece was we were that time working at this migration and the things we did around the provision, we are not tied to something that we have seen in the portfolio that is going to fall in on us. It was tied to the fact that we wanted to be bold enough at this point in time and give ourselves a flexibility to move the identified assets out as quickly as possible. So, we want the market to really pay attention to that. We were moving it up to 80% of the non-performers and really then have the opportunity to go on with normalized results as we go forward.
Peyton Green - FTN Midwest Securities Corp.
And then in terms of the deposit growth, how optimistic are you that you can, I guess, regain the deposit momentum that you had in past years going forward?
I think that is a challenge that all banks have to look out right now because with the media bringing up IndyMac and running off around 90 banks being identified as a problem list, it gets the depositors' concern but one of the things that we are having a lot of success with right now is to see various products and so what the nervousness around all banks it seems like getting movement around these things and the other initiatives that we are doing are benefiting us in some of our markets. So, I think given what we have as a footprint where our footprint resides the economies are good and having product that we can assure safety in the deposits. I think we can continue traction around this.
Peyton Green - FTN Midwest Securities Corp.
Okay and then with respect to the non-interest bearing, was that growth from new customers that you began banking or was it really just increased balances with existing?
It was both.
I am showing no further questions in the audio queue.
We will be back and touch just a little bit more on one of the aspects of Peyton’s question. One of the things that we are trying to be very vigilant on right now is to take an even closer look at the large loan relationships that we have in the bank even those that are currently in a past grade to try to identify situations that might have even a hint of heading the wrong direction so we can be very proactive in restructuring those credits in some cases maybe even encourage them to refinance out of the bank and protect our downside. So, we are trying to be very proactive in doing that relative to further movement especially towards non-performing credits and we keep a very close eye on our potential problem loans and in particular, for example, with that one significant credit in the Albuquerque region, it is an owner occupied commercial enterprise. That relationship was around $15 million. This is one that, on the surface at least, appears to be well-secured at this point.
We are getting new appraisal indications on that property because quite frankly that is one, for example, that has the potential to move to a non-performing status at some point in the future. But we believe our best defense really is a good offense if you will and identifying these potential problems and as I mentioned even those that have a hint of the possible future problem so that we can be very aggressive on the front end in shoring up our collateral position, getting a little more aggressive structuring of the credits and doing things that will serve us well down the road.
So, overall, we have some challenges facing us but we are very encouraged that with all that we have done in this quarter, we have kind of cleared the area relative to a goodwill situation. We think we are well positioned with our allowance for loan loss and again, at 80% of our non-performing loans, we think especially well on the real estate collateral that backs most of those problem loans, for the non-performing loans that we are very well positioned from an overall allowance for loan loss standpoint. We certainly look forward to improved bottom line results for the rest of the year; again we believe we are doing all the right things to assure that those results will be solid going forward. We appreciate your time and attention this morning and we look forward to delivering what we hope is a much better report at the end of the third quarter.
Bradley Vander Ploeg with Raymond James, your line is open.
Bradley Vander Ploeg - Raymond James Financial Inc.
Pat, you mentioned that you are hoping to return the solid financial performance in the next few years and I was just wondering if you could elaborate on that with the benchmarks you are talking about and over what period of time?
Well, I think the first focus is the second half of this year and right now we believe we can return to a normal provisioning level. We do not see anything right now that is going to cost us to do anything close to extraordinary in the provision for the remainder of the year. Obviously, that depends on a lot of factors and that could change but today we are fairly confident that we are going to have a normal provision. So, we would expect what I would consider to be a moderate profitability the remainder of the year. We are certainly hoping that once we get passed the elections continue to work our problem assets toward the rest of the year will then next year we will see a gradual ramp up to more normal levels of profitability probably moving, we certainly hope towards an ROA perhaps in the 0.75% range.
That again is going to depend on a lot of factors. We believe that is achievable. If the Fed starts to raise interest rates, we will get a little bit of boost in our interest margin which would be a big help along those lines. But even in a static rate environment we think we have got a plan where we can, through further expense controls, some continued improvement in the non-interest income and maintaining that provision at a reasonable level that we can have pretty solid performance going forward. It is probably going to take, we think 18 months to maybe even two years to completely work through the problem asset cycle that we are seeing right now. Again, we get a sense that maybe we have not quite exactly hit bottom but we sure feel like we are pretty close to it in terms of the economies of our footprint. The one advantage of the goodwill impairment charges is that we will get a little help in terms of our return on equity but for those who have been focused on return intangible equity that a question will not have any real impact. So, again, we have got a lot of variables here that will impact those results but giving the normalized positioning levels, we think we can perform fairly well in terms of profitability.
Bradley Vander Ploeg - Raymond James Financial Inc.
I am not sure exactly how to ask this but the goodwill charge tears off a pretty big tax benefit that helps offset the provision expense and I am just curious if that flexibility played into your decision about what type of provision you are able to take without hitting tangible book value in the quarter.
It really did not. We took a look at the overall provision and the trends on our non-performing asset levels and the market seemed to be continually telling us that perhaps our allowance was not as large as it should be and so it really was arrived at completely independent of the tax of that. When we made the initial decision, we really were not certain what the tax benefit would be and we are anticipating less than and what it ended up being so it was good news by the time we went through the process but we really did not take that into account in making the decision on the provision.
Bradley Vander Ploeg - Raymond James Financial Inc.
Alright, thanks and lastly, just about the Utah market where you had seen one large credit going under non-performing during the period and I am just curious if you are at all concerned about the rest of that portfolio particularly given that you have got some people up there that probably are not going to be with the company going forward. Is there anything else you need to do to make sure that those loans are being attended to properly?
Well, one of the advantages that we have in this situation is we are keeping some of the existing people on an extended basis to help us work through those problems and one in particular gentlemen by the name of Bob Parks we think has a very good mindset relative to helping us work through any of those problems or potential problems in that market. And the Salt Lake market has been along that has been extraordinarily strong the past few years but our sense is that in the last six months in particular that it is definitely slowing down especially the residential housing market that is further out from the center part of town.
So, we are seeing some weaknesses in the sales activity there especially in certain locations. So, we think again, we have got the experienced people in that market but right now our plan is to keep them on board and they have told us that they will work with us on it. So, we are optimistic that we can move through those problems in a pretty orderly fashion. We will continue to keep an eye on that market, see if there is any further drift in the sales activity. But again, we are going to aggressively manage sales loans totals down just as quickly as we can.
Peyton Green with FTN Midwest Securities, your line is open.
Peyton Green - FTN Midwest Securities Corp.
Yes. Mike, you have alluded to this over the past couple of calls but the possibility might exist for you all to access some credits through sales and I was just wondering if you see any improvement on the bid price buyers of loans lately?
Well, we have not and we are not interested in selling portfolios to the market at large and taking any haircuts on that but we have been in negotiations with several groups or several banks that facilitate participations and we think we can possibly layoff anywhere from $30 million to $60 million participation loans. So, in that case we would still service in but we would not have to take a write down on portfolios and those are loans that are the ones we have been looking at participating are some of our better credits, well seasoned and in categories that, again, with these other banks have an interest in. So, it could help us from a capital standpoint. It is not going to help us with the concentration in our construction portfolio because it is not going to come out of that segment of it. But definitely, if we can get this down, we will help our overall capital position
And I am now showing no further questions at this time.
Again, we certainly appreciate everybody’s time and attention this morning and we look forward to visiting with you when we report our third quarter results. Thank you.
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