Bryn Mawr Bank Corporation
Q2 2008 Earnings Call Transcript

Published: 25 Jul 2008

[Operator:]

Good afternoon. My name is Tina; I would be your conference operator today. At this time, I would like to welcome everyone to the Bryn Mawr Bank Corporation second quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. (Operator instructions) Thank you. It is now my pleasure to turn this call over to your host, Duncan Smith. Sir, you may begin your conference.

[Duncan Smith:]

Thank you, Tina. And thanks for everyone for joining us today. If you’ve not received our press release that was issued at 4 pm today, it is available on our website at www.bmtc.com or by calling 610-228-2140. Ted Peters, Chairman and CEO of the Bryn Mawr Trust Company, will make some introductory comments on the quarter, our strategic initiatives, and our view of the competitive landscape. After that, we’ll take your questions. The archives of this conference call will be available online at the Bryn Mawr Bank Corp website or by calling 800-642-1687 and entering conference PIN number 53962580. A replay will be available approximately two hours after the call concludes. Before we begin, please be advised that during the course of this conference call, management may make forward-looking statements which are not historical facts. Forward-looking statements may be identified by the use of the word such as believe, expect, anticipate, intend, plan, estimate, could, may, likely, probably or possibly. These statements include but are not limited to statements regarding plans, objectives, and expectations with regards to future operations and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to project and generally beyond the control of the Bryn Mawr Bank Corporation and its management. It could cause actual results to differ materially from those expressed and/or implied by the forward-looking statement and information from this statement. Factors that may affect future performance as discussed in this document filed by the Bryn Mawr Bank Corporation with the SEC from time to time including the company's annual report on Form 10-K for the year end on December 31, 2007. Bryn Mawr Bank Corp. undertakes no obligations to update these forward-looking statements to reflect events or circumstances that occur after the date that such statements were made. Thanks and I'd like to turn the call over to Ted.

[Ted Peters:]

Thanks, Duncan, and thank you everyone for joining us today. We are pleased to report strong second quarter results with earnings of $0.37 per diluted share up from both a year ago and the first quarter. Results in the second quarter were driven primarily by a 15% increase in our loan and lease portfolio as well as some long-awaited stabilization in our net interest margin. Bryn Mawr’s strong banking and wealth management franchise and disciplined credit quality management has enabled us to focus on building our business at a time when many other financial institutions both large and small are struggling for survival. The Board of Directors has expressed their continued confidence in the soundness and security of your bank by authorizing a 7.7% increase in the quarterly dividend from $0.13 per share to $0.14 per share. For the second quarter of 2008, we reported diluted earnings per share of $0.37 compared to $0.36 per share for the second quarter of 2007. Net income for the current quarter was $3.2 million compared to $3.1 million in 2007. For the quarter, the annualized return on equity was 13.65% compared to 14.66% last year. Return on assets was 1.4% in the quarter compared to 1.49% last year. With our loan and lease portfolio up over 15%, we have clearly not lost any of our momentum. Leasing continues to be our fastest growing newer business initiative. High-yielding leases were added to our asset mix to help diversify and sustain yield on our overall portfolio during period were yields have been under pressure. In the second quarter, lease yield averaged just under 11% and made a positive contribution to the net interest margin and net interest income. At June 30th, the leasing portfolio had grown to $54.1 million from $28.9 million a year ago and now represents 6.3% of our total loan and leases portfolio. We originate leases through a network of national brokers, all are approved. Only four brokers of our 50 brokers represent greater than 5% of total originations with the largest less than 7%. This broad network had created a portfolio and choice diversity in equipment, industry, and geography. Healthcare-related equipment represents the largest proportion of the portfolio at 18%. Customer concentration by state mirrors population concentration, with California representing 14%, New York State 8%, and Texas, New Jersey, Pennsylvania, and Florida each representing about 7%. Given changing economic conditions in the third quarter of 2007, we began modifying our underwriting standards on new lease originations, eliminating unprofitable sources of business and concentrating new origination in the best credit categories. Other than leasing, general loan production was up once again across the portfolio. Compared to a year ago, commercial and industrial loan industrial loans were up 20%, and commercial mortgages are up over 8%. The growth largely came from existing customers and prospects in our immediate trade area. The fastest growing loan product on the personal loan side is our home equity line of credit product which was up 25%. This growth occurred with retail customers within our footprint which serves an affluent area that has not been subject to wide real estate price swings. The residential mortgage balances were also up very nicely at 9%. Though competition for good credit remains quite brisk, we are maintaining pricing discipline to help sustain the overall portfolio yield. Credit quality in the aggregate remains very good. Charge-offs for this quarter fell to 23 basis points from 31 basis points in the first quarter. However, the provision for loan and lease losses was $781,000 in the quarter, primarily in recognition of the change in the complexion of our portfolio. Our conventional loan portfolio has been performing consistent with our long-term record of strong credit quality as we have individually underwritten all our loans. We are not burdened with sub prime or other risky loans that now plague many lenders. We are working very hard to maintain high credit quality across the entire portfolio and are already well reserved with an allowance for loan and lease losses that exceeds 500% of non-performing loans and leases. On the non-interest income side, wealth management revenues continued to reflect a weak stock market and the loss of the community banks portfolio business. Community banks, as you may remember, was purchased recently by Susquehanna Bancshares. Wealth management revenues for the second quarter of 2008 were flat with the first quarter of 2008 and down to 4% compared to the second quarter of last year. Consistent with our strategy to grow both organically as well as through acquisition, on July 15, we closed the acquisition of Lau Associates, a Wilmington, Delaware-based financial planning and money management firm, with approximately $603 million of assets under management and $156 million of assets under supervision. Lau Associates is the premier provider of multi-family office services in the mid-Atlantic region. We are excited and honored that they have chosen to affiliate themselves with the Bryn Mawr Trust Company. Lau Associates will operate as a separate entity under the continued leadership of Judy Lau, their dynamic founder. With this acquisition, our total assets under management and administration will increase to approximately $3 billion, maintaining Bryn Mawr as one of the largest wealth managers in the region. This will be an all-cash transaction and is anticipated to be immediately accretive to earnings. We remain open to growth through additional acquisitions. Also in our wealth management business, the Bryn Mawr Trust Company of Delaware charter was recently approved and we expect Bryn Mawr Trust of Delaware to open later this quarter. A Delaware trust charter provides a number of advantages in competing for both individual and institutional trust business, which we expect to lead to growth in trust assets managed and administered. In retail banking, the Westchester Regional Banking Office which is being constructed right now should be completed by the middle of the fourth quarter. We also recently completed a full remodeling of our Wayne branch. A more significant presence in both of these affluent communities should improve our deposit gathering and loan growth opportunities. In addition to maintaining pricing discipline with our loan products, we initiated some balance sheet management strategies including increasing our investment portfolio to primarily improve liquidity and to capitalize on interest rates growths. Our investment security’s portfolio is now $112 million and our proportion of investment securities relative to the entire balance sheet is moving in the direction of similar financial institutions. In the second quarter, checking, money market, and saving deposit accounts continue to grow. We also saw an increase in average non-interest bearing deposits. Also in the second quarter, the cost of wholesale deposits and borrowing has fallen as higher price obligations matured and were re-priced at lower rates. On the cost side, the year over year growth in operating expenses was around 3% this quarter despite the faster increase in salaries and wages needed to support our new growth initiatives. Our capital ratios are strong and we remain well-capitalized according to all federal and state regulatory guidelines. Some of the key ratios that are indicators of our financial strength include – First, our allowance for loan and lease losses at 509% of our non-performing loans and leases. Two, the proportion of our total loan portfolio comprised of non-performing loans and leases is only 20 basis points. Three, the overall allowance for loan and lease losses is $8.7 million or 1.02% of total portfolio loans and leases. To summarize, we have demonstrated the ability to generate attractive asset growth across the board or across a broad crossed selection of loan and lease categories while maintaining our high credit standards and making underwriting modifications where economic conditions warrant. We are making progress to stabilize our net interest margin. Through the acquisition of Lau Associates and the opening of a Delaware trust company, we are adding over $600 million of assets under management and over $150 million of assets under supervision, broadening the breadth of our product offerings and improving scale in our wealth management business. We are also growing our retail banking presence. We are not immune from macro economic forces that may slow asset growth or play havoc with interest rates and we are ever mindful how we can best position your bank for changes in the external environment. For the same time, we are confident in the outstanding franchise we have established our market and a solid financial position from which we operate. We believe that Bryn Mawr and Bryn Mawr Bank Corp. are well-positioned to continue to provide shareholders attractive returns on a capital with which we have been entrusted. With that, we’ll open the lines for any questions. Operator, if you could compile the Q&A roster please?

[Operator:]

(Operator instructions) Your first question comes from Jason O’Donnell from Boenning & Scattergood

[Ted Peters:]

Hi, Jason.

[Jason O’Donnell:]

Good afternoon or good evening, how are you?

[Ted Peters:]

Hi Jason. We’re fine, thank you.

[Jason O’Donnell:]

Good. Listen, congratulations on a good quarter! I just have a couple of questions and forgive me if I hop around a little bit, but just – on the recent acquisition of JJ Holdings and the Lau subsidiaries, can you please tell me roughly how much of a contribution you expect to trust revenue on a quarterly basis and also – if you have it – give me a sense of how much do you expect an increase in the way operating expenses as a result of that acquisition?

[Ted Peters:]

Duncan will handle that.

[Jason O’Donnell:]

Okay.

[Duncan Smith:]

I can give you some of that information. We are expecting about $4 million in annual revenue, so about $1 million a quarter there.

[Jason O’Donnell:]

Okay.

[Duncan Smith:]

The margins on that are going to be anywhere from 30% to 40%.

[Jason O’Donnell:]

Okay, great.

[Duncan Smith:]

That’s before, any of the deal amortization type costs that we’re still working through.

[Jason O’Donnell:]

Also, on the margin, I noticed obviously that bottomed out of this quarter and hopefully at least it flattened and I am just wondering what your thoughts are, given your current level of growth and kind of what’s your expectation here for the third quarter assuming that we don’t see any rate increases over the near term?

[Duncan Smith:]

We were very happy with our margin in the second quarter; it was 397; it was exactly the same as the first quarter. So, we basically stabilized. As you know, our margin had been dropping pretty consistently for the last year, so this is, in fact – this really is despite the fact that we’re growing the bank and funding some of that growth through more expensive wholesale money. So we feel confident that we can maintain that margin. We are repricing some of our wholesale funding right now. So, we think we will stay in that range of 397. It could be a little bit lower, it could be a little bit higher, but we think we will be in that range.

[Jason O’Donnell:]

Okay, great. That’s helpful. On the home equity portfolio, it looked like you had this before if I recall previously, the bulk of the loan growth was coming sort of commercial real estate or commercial C&I or some combination as well and you had some increases in equipment lease portfolio as well. There is sort of more diversification in growth this quarter. On the home equity side though, can you just give me a breakout if you have between the loans and the lines and kind of where you are seeing the bulk of the increase?

[Ted Peters:]

Well, we are seeing the bulk of the increase in lines of credit, what we call HELOCs, home equity lines of credit. But we’re seeing a pretty good general activity on the consumer borrowing side across the board. What we’ve really seen in the last early month or so is really kind of what I would call slight to [ph] quality, we have a number of people who were coming to prim our trust because we are perceived as a very strong institution and they are bringing their deposits and they’re bringing some of their lending business with us too. So we were very pleasantly surprised by that increase in the home equity line of credit business and hopefully it will continue.

[Jason O’Donnell:]

Okay. And then lastly with respect to credit quality, can you just give us some color on, if you don’t mind, on the composition of net charge-offs and how much of that is from the equipment lease portfolio roughly and also what types of loans are you seeing that are moving in the non-performing in the second quarter?

[Duncan Smith:]

Okay, Jason, I can give you some of that. Almost all of those charge-offs for the quarter are in the leasing portfolio. The charge-offs in the banking portfolio or a non-leasing portfolio are almost nil. It’s just a nominal amount there.

[Jason O’Donnell:]

Okay.

[Ted Peters:]

So what we do expect that’s similar type numbers in the leasing portfolio probably for the next two quarters and as the changes we made at the end of ’07 works through the portfolio and it continues to mature.

[Jason O’Donnell:]

Okay. And then on the non-performing assets side, you had an increase this quarter, correct? I mean it wasn’t – the total number was still fairly small but…

[Ted Peters:]

I can give you – approximately $1 million of that is residential mortgages probably first (inaudible) type residential mortgages. $600,000 is leasing related and then there are assorted other pieces or the two big pieces.

[Duncan Smith:]

When you’re kind of low and you get a little bit of some – a little stuff comes in it, it makes the number jump and look a little higher than maybe it really is. At the end of the year, we were 25 BPs and then at the end of first quarter we got down what 9, 10, or 12 and now, we’re back up to 20. So we think it’s a very reasonable number and we’re very happy where we are on it. But once again, hopefully, it could drop down next quarter. It could go up a little bit, but we feel comfortable with the credit quality.

[Ted Peters:]

And that leasing number is 17 different leases and on the residential, it’s about 12 different mortgages. So it’s not concentrated on any one piece. They’re all smaller pieces.

[Jason O’Donnell:]

Okay. Great. Thank you very much.

[Ted Peters:]

Thanks, Jason.

[Operator:]

Your next question comes from David Darst of FTN Midwest.

[Ted Peters:]

Hi, David. How are you?

[David Darst:]

Good. Good afternoon. You indicated (inaudible) that you are seeing some or getting some income from people turning in the leases?

[Ted Peters:]

You mean people –

[David Darst:]

Right. Yes, it’s early termination of the lease?

[Duncan Smith:]

Well, when people terminate leases early and pay them off, we make money on it because they have to make all the payments for the remaining term. I know that’s something where we make money on, but I wasn’t really aware that was anything significant.

[Ted Peters:]

It was a big number in the – I don’t have that right in front of me. I’ll see if I can work that up, but it was a noticeable increase in this quarter compared to other quarters.

[David Darst:]

Is it something related to tariff fuel costs and the people no longer wanting to use the equipment or it is not economical for them to use the equipment?

[Duncan Smith:]

I think our equipment is – I don't think it's concentrated in moving vehicles. So, it's all different kinds. But that's a good question, I don't think we are able to answer that.

[David Darst:]

Okay. How much is transportation or construction related?

[Duncan Smith:]

Well, we did in (inaudible) did have some data specifically for you in there. But I don't have that in front of me.

[David Darst:]

Okay. I think you just have (inaudible) data, right?

[Duncan Smith:]

I think what we said in there is that medical has 18% and there was no one other significant industry in there, that was the only – that was the biggest one that we noted.

[David Darst:]

Okay. And so you feel like this level of charge-off will continue, $800,000 to $900,000 for the next couple of quarters?

[Duncan Smith:]

Yes. Hopefully not that – I don't think they are that high.

[David Darst:]

Okay. Because you made some changes right that you thought was going to bring the level down…

[Duncan Smith:]

Yes.

[David Darst:]

Have those not really worked through yet?

[Duncan Smith:]

Yes, it's exactly right. In the latter part of 2007, we changed the credit standards a little bit. We raised the FICO score. We had a (inaudible) business with. We tried to concentrate more on medical equipment and telecommunications equipment, got away from some other things. So, it takes a while for it kind of work through, but we feel that there was a big improvement in the second quarter over the first quarter and we think the third quarter, while there's still going to be charge-offs, will be hopefully around or an improvement from the second quarter. So we feel comfortable where we are. Clearly, we are watching this very, very closely.

[David Darst:]

Okay. How is your commercial pipeline?

[Duncan Smith:]

Commercial pipeline is good. We are seeing a lot of loan requests out there, quite frankly, from clients who are involved with one or two with the larger banks, national banks who have experienced a little bit of problem and some bad publicity, so we are seeing some loan requests from those type of clients and also we are seeing some deposit inflows from them as well. So, we have – we are very, very good commercial lenders, we’re very good business lenders and we have a good reputation for that in Philadelphia area and so our pipeline has remained really steady in that area since really I have been here, seven or eight years.

[David Darst:]

Okay. That sounds good. So we would assume there is slight to quality for you and it will continue probably outside (inaudible) the larger banks?

[Duncan Smith:]

We think so. Yes, I mean, we don't want to name names. There is one large bank in our area that's had a lot of bad publicity nationally on their credit quality and some other things and that's where we're really seeing a number of these loan requests. On the other hand, when anybody comes from other bank, why are you leaving, so we look at it pretty closely. The competition is brisk out there too. I mean we are in a market that's very heavily banked and a lot of very good banks in this market that we compete against.

[David Darst:]

Okay. Thanks.

[Duncan Smith:]

Thanks, David.

[David Darst:]

Yes, sir.

[Operator:]

Your next question comes from Gerry Heffernan of Lord Abbett.

[Duncan Smith:]

Hi, Gerry.

[Gerry Heffernan:]

Good afternoon, everybody. I’d like to – this is more of trying to get into management's head question here. The loan and lease portfolio growth is 15% is – it boasts very large, I mean it's a very impressive number. I would like the approaches in this standpoint of – question is, is this the time that you want to be growing that, that quickly? And perhaps another way to look at it is that since a lot of this growth needs to be funded with wholesale funding, an expensive form of funding, would it be better to be pricing up your offerings and accepting a lower growth rate with a higher yield given the fact that the funding mechanism is a wholesale funding. How do you work that balance?

[Ted Peters:]

Gerry, you must have been sitting in some of our management meetings or something. That's exactly what we tried to do and really have done. We are growing the leasing portfolio at a much slower rate than we were six or eight months ago and while we didn't raise rates, we maintained it. While a lot of the leasing industry had been dropping rates, we have maintained our rate up around at 11%. So by keeping our rates up a little bit and being a little bit more selective, we have slowed our growth down. Our net is, what happens in the leasing business since the average lease is 42 months, you get a lot of run off. So, right now, we are booking about $2.7 million in leases a month and we are running off about $1.7 million. So, our net increase in our leasing portfolio is approximately $1 million a month net. And that's much less than it was say the previous year or so. So, we’ve actually sort of done what you've kind of suggested; we have maintained our margins and we've actually increased our margin in that business and we have improved our credit quality too.

[Gerry Heffernan:]

Okay. What about the non-leasing portfolio? What about the loan portfolio and the HELOCs and things of that sort?

[Ted Peters:]

Well, a couple things. One, loan demand is strong, our loan growth last year was almost 18%; the previous year was almost 15%. That's across the board for the whole institution. And we talk a lot about maintaining excellent quality that's always first and so we talk about, well, should we also then be increasing our rates – our commercial loan rates following that growth. One of the things, it's a very competitive market, the competition is brisk. You hate the sort to walk away from business because it's not only the loan business, you get all the deposit business, and you get the 401(k) from the companies, you get the personal account to the owners, the employee – we have a program where we do special things for employees or clients of ours, so we really develop with our lending clients – business clients especially a very holistic kind of relationship. So to walk away from a deal for an 8th of a point of a quarter of a point sometimes makes sense and sometimes it doesn't make sense. The strong growth in loan has put some stress on our balance sheet. I think you know that and by looking at the numbers and so we are probably going to be modeling next year a little bit slower loan growth, both because the lease portfolio will grow little slower and perhaps what you're saying maybe be a little less competitive on some pricing but we will see how that goes.

[Gerry Heffernan:]

I mean I imagine the discussion with the customer has got to go a longer lines of the – you get what your pay for were, we are going to be giving you a much higher service level, this is a much better banking experience, look what's going on with the other banks in our area, and guys you seem to be doing it great job here, very happy with everything but when I see wholesale funding at 35%, when it was at 27% last month, (inaudible) in there?

[Ted Peters:]

Yes, I would agree. I mean quite frankly we have a number of deals recently, I mean, sort of anecdotal where we were a quarter of a point to three-eighths of the point over our competition and we got the business or we kept the business if it is an existing client. So, you're right. There is a value out there on preferred service and so the quality institution we are, whether that is worth an eighth of a point or quarter, three-eighths of a point depends upon the client and the deal – the size of the deal, quite frankly. The smaller the transaction, $300,000 loan doesn't have the much price-sensitivity as a $3 million loan obviously. But, we are watching and we spent a lot of time on our funding. I think the liability side of the balance sheet as we all know is most difficult of banking right now and the use of wholesale funding and core deposits and other things. So, we're – it's something Gerry, we are spending a lot of time and attention on and we realize that, to you use your metaphor, we are stretching rubber band a little bit.

[Gerry Heffernan:]

Okay. If I could ask – if I could switch topics and go to the loan loss reserves, 1.02% reserve level which is down from I guess 1.16% a year ago. I find it interesting/peculiar that we would have the loan loss reserve going to a lower level given the overall banking backdrop of which we're currently working. All my discussions with other banks CEOs right now is that yes, well, they have been pressed over the last several years to justify their loan loss reserves that all means with the regulator is right now are indicative of an overall theme of what we should have a better margin of safety, we should have a – we're looking towards higher loan loss reserves.

[Duncan Smith.:]

This is Duncan Smith. I'll just comment on that. The reserve for loan loss process as you know is a very – I guess difficult, subjective, technical process that you have different forces pulling different ways, you have the SEC, you have the examiners from regulators. So we spent a lot of time on the allowance for loan losses. Although we have one allowance for the entire balance sheet, you can really break it into two parts. We have got a leasing portfolio, and that's – we have about 1.75% set up for the leasing portfolio, and we have talked already on the call about the leasing charge-offs and then you have the distinct non-leasing portfolio that, at this time based on all indicators and all metrics, is performing very well. So while maybe we would love to at times put away dollars for rainy days, things like that, we have a process, we go through the process and this is based on the credit quality and the performance of our loan. This is what makes sense and we do understand the issue and we are prepared to talk about it. But the credit quality has held up quite well so far, until something changes we're going to go along with this.

[Gerry Heffernan:]

Okay.

[Ted Peters:]

Gerry, I want to add one thing to that.

[Gerry Heffernan:]

Sure.

[Ted Peters:]

On the leasing portfolio, we have a formula, we hit 120 days, it's gone whether we think it's collectable or not collectable or whatever, so because of that we're basically regularly replenishing that leasing loan loss provision.

[Gerry Heffernan:]

That makes sense to me. But when you're talking about HELOCs and other related lending activities that are widely known to be suffering default pressure, it just seems to me to say you look even though our current experience – and I'm certainly not talking anything about rainy day because that is not appropriate, but if you look at (inaudible) when everybody is catching the cold assuming that you may get a sniffle at some point is not stowing away for rainy day, I mean that's just being diligent.

[Ted Peters:]

Well, we are very fortunate – this brings us to talk about the residential real estate loans that we have to residential mortgages we hold in the books or HELOCs or home equity loans or whatever. We're in a very nice market here. We're in a fluent market. The Philadelphia area, especially the Philadelphia suburbs, we do not see the highs and we don't see the lows. So, we're not like Florida or California places like that. Home price is in this area just basically flattened up, and they're not going up very much, but they're certainly not going down. We haven't seen the depreciation, we haven't seen certain area. So, we have not noticed if you look at our delinquencies in those areas residential real estate, home equity lines of credit, home equity loans, we don't see any indication of problems in that area. The delinquency figures and everything are probably about the same they are now they were last year and they were five years ago. They are very low.

[Gerry Heffernan:]

Ted, I think the last time we spoke we talked about as far as residential construction that they were – if my memory serves me correctly, 10 to 12 builders local that you have dealt with for a long time.

[Ted Peters:]

Right.

[Gerry Heffernan:]

They never were more than four, six houses at any one time. Can you just review that probably you still working with all of them, have you pared back on that, have any of them decided to slow down their business? Anything there that we should be concerned about?

[Ted Peters:]

We have – it's really of the same basic book of builders. These are people who have been in business, sometimes they inherited the business from their parents, and they have been in business 40, 50 years, and interestingly enough they anticipated a slowdown long before most people did. So, a lot of them got out of building larger $2 million to $5 million homes and they serve downsized into building sort of clustered housing, age targeted communities, more in the $600,000 to $1 million range that have worked well for them. Some of the larger projects we're in basically sold down, so we're very comfortable where we're. The absorption rates on the more expensive houses you're correct are much slower than anybody anticipated, but we feel very comfortable of where we're. Our total site construction loans, these are residential site development loans which are really where the risk in a portfolio. That's only around $45 million and that's on a loan portfolio about $850 million. So it's really a relatively manageable part of it. But there is a fair amount of risk there, you're right. But where we're right now, we feel very comfortable with it. We're not taking on new builders, we've actually budget this year, a decrease in those outstandings and that's what is happening right now. So, that's where we are.

[Gerry Heffernan:]

Okay. Thank you very much for taking my questions. I'll let someone else take the mike here.

[Ted Peters:]

Right. Thanks, Gerry.

[Operator:]

(Operator instructions) There appears to be no questions at this time. I'd now like to turn the floor back over to your host for any closing comments.

[Ted Peters:]

This is Ted Peters. And once again, Duncan and I would like to thank you for tuning in. We appreciate the following institutions, the shareholders and analysts, and if you do have any questions or comments feel free to give us a call. Thank you very much.

[Operator:]

Thank you. This concludes today's Bryn Mawr conference call. You may now disconnect.