Q4 2020 Central Pacific Financial Corp Earnings Call
Good afternoon, ladies and gentlemen, thank you for standing by and welcome to the Central Pacific Financial Corp, 's fourth quarter, 'twenty 'twenty conference call.
It's the only today's presentation all parties will be on listen only mode.
The presentation conference will be opened for questions.
This call's being recorded and will be available for replay shortly after its completion on the company's website at Www Dot C. P B Dot bank.
Now I'd like to turn the call over the Mr. David Morimoto Executive Vice President Chief Financial Officer. Please go ahead.
Thank you Nick Thank you all for joining us as we review the financial results for the fourth quarter of 2020 per Central Pacific Financial Corp.
With me this morning on Paul Davis, Chairman, and Chief Executive Officer, Catherine NGO President.
Arnold Martinez Executive Vice President and Chief Banking Officer.
Anna Hu Executive Vice President and Chief Credit Officer.
We have prepared a slide presentation that we will refer to the remarks today.
The patient is available in the Investor Relations section of our website at <unk> Dot day.
During the course of todays call management may make forward looking statements.
We believe these statements are based on reasonable assumptions. They involve risks that may cause actual results to differ materially from those projected.
Well, a complete discussion of the risk related to our forward looking statements. Please refer to slide two of our presentation.
And now I'll turn the call over to Paul.
Thank you David and good morning, everyone as always we appreciate your interest in Central Pacific Financial Corp.
Start of 2021 is a very exciting five per central Pacific.
We are pleased to announce that we successfully completed a rise 2020 initiatives, which positions us extremely well on the current environment for the future.
Earlier this week, we had a grand opening for the fully renovated central Pacific Plaza, a lobby, which features a modernized made branch co working space for a small businesses and nonprofit and a large open lobby that welcomes the community is a great fresh new energy to the downtown.
Sure.
We also completed a horizon 2020 milestones on digital banking with a new online and mobile banking platforms.
On the third quarter.
And the completion of a full ATM network upgrade in the fourth quarter.
You may have noticed that we have a fresh new look in our slide presentation of this quarter. This is part of an exciting new brand design that we just watched.
The new brand reflects both of the company's unique history and a bright future ahead.
We had strong financial results for the fourth quarter and full year of 2020, while net income was impacted by one time expenses and higher provisions for credit losses.
Our core pretax pre provision earnings were solid.
We continue the thoroughly review of regularly monitor our loan portfolio to appropriately manage the credit risk in the pandemic environment.
During the fourth quarter, our total balance of loans on payment deferrals decreased significantly and was down two 3% of total loans, excluding PPP loans at year end.
Finally, our board of directors declared a quarterly cash dividend of 23 per share and approved a new share repurchase authorization.
I'd like to now turn the call over to Catherine to provide an update on our state of companies that make status Kathryn.
Thank you Paul.
The standby continues to manage through the COVID-19 pandemic we.
We are a vaccine our residents as quickly as possible and have worked through the first tier a first responders on frontline medical workers.
We have recently opened a mass vaccination price in Honolulu, we move to the next year, which includes the elderly population.
Our COVID-19 infection rate in this day FY <unk> currently the second.
And the nation on a per capita basis.
The insurance on the high remained open but the requirement for a negative called the cash.
A question.
The daily visit or a revival accounts have recently been in the five to 8000 range per day, but it's still significantly.
Significantly down compared to a year ago.
We are optimistic that with the mass excavation of initiatives, we will start to see a Hawaii economic recovery.
Yeah.
A central part of the bank, we continued to operate with the highest standards of health safety and social distancing.
We consolidated four branches into neighboring bandwidth from 2023 of which were in store branches that have two smaller footprint of adequate social.
We expect to retain customers and deposits from these closed branches as we can.
The need to provide a professional service on our other branches.
On channel.
Much of our back office teams continue to work flexible remote schedule and all employees are required to complete a daily online health questionnaire prior to starting from each day.
We believe the actions we've taken will continue to enable us to provide a environment.
All of the our employees and customers.
I'd like to turn the call over now to Arnold Martines, Our executive Vice President and Chief Banking Officer Arnold.
Thank you Catherine and the fourth quarter, excluding PPP loan pay offs of $112 million.
<unk> grew its loan portfolio by 46 million driven by growth in commercial construction and residential mortgages.
And commercial mortgages.
Our residential lending team continued to outperform with record levels of production, resulting in a five 4 billion in mortgage banking income for the quarter.
For the 2020 year mortgage banking income was $13 7 million.
Which was more than double the income from the previous year on.
The net debt by over 1 billion non production.
During the fourth quarter, we received a process a significant amount of TEP forgiveness application.
Which resulted in the recognition of $5 4 million in fee income.
We continue to process PGE forgiveness applications and recently started.
<unk> on applications for both the first draw and the second draw of loans from our business customers. Additionally.
Additionally, our team continues to engage and remain steadfast.
And our support of our customers and for the broader business should be the impacted by COVID-19.
Foreign deposits during the fourth quarter decreased by 132 million.
Which is consistent with year end seasonal inflows augmented by our frontline business development efforts.
For the 2020 year core deposits decreased by 787 million.
Additionally, our cost of total deposits declined by four basis points from the prior quarter and is now down to nine basis.
Providing GAAP the class.
Digital technology or a customers remains a key priority for us in.
In 2020, we launched our new consumer mobile and online platform and completed the rollout of a new ATM.
We are seeing strong adoption and utilization of these new digital tools by our customers.
Just yesterday, we launched a new platform that will allow our customers and other consumers to open a new personal checking or savings accounts online or apply for a consumer loans online.
Our team is laser focused on adding additional digital products and services. This year and we look forward to updating you in the coming quarters.
Now on we'd like to turn the call over to Anna.
Executive Vice President and Chief Credit officer to provide detail on our credit portfolio risk management activities.
Yes.
Thank you Arnaud.
Here on the loan portfolio on them.
Our <unk> nine $6 billion vis vis the vice president of consumer and 45% of commercial.
During the quarter, we continued to monitor the loan portfolio and provided support to a customer as they continue to navigate through the ongoing changes in the marketplace.
And our customers by providing additional loan payment deferrals as needed and we were pleased to see a significant number of our lithium making their monthly on payments.
At quarter end of the total balance of loans on payment deferrals declined to $120 million, a 3% of the total loan portfolio, excluding <unk> balance.
Irene deferral rate was 15% and was primarily driven by residential loans on payment deferral or extended to nine months.
During the quarter, we saw a significant decline in consumer inbound on deferral as customers return to making long payment.
Of the approximately 4200 consumer loans that returned to a net only 7% of granted a short term loan modification with 93% net maintain at contractual term.
In the commercial and commercial real estate loan portfolio. The total balance of loans on payment deferral declines of $47 million or 1% of the total loan portfolio, excluding PPP balance.
The highest exposure by industry continues to be real estate and rental on leasing totaling $33 million.
A decline of $14 million sequential quarter.
Loans on the real estate and rental and leasing industry are supported by low loan to value ratio.
The majority of these bars are expected to be the non payments at the end of the six months non payment deferral non.
Payment deferrals for a high risk of industry totaled $12 million on zero, 3% of the total loan portfolio.
Excluding PPP balance.
[laughter].
As of January 20th our total balance of on payment.
Payment deferral decreased further to $101 million arches percentage of total loans, excluding PPP balance.
Additional details on our non payment deferral can be found on slides 20 and 21.
During the quarter criticized loans declined by $45 million sequential quarter of $192 million of four 2% of the total loan portfolio, excluding PPP balance.
Special mention loans declined by $6 3 million to $142 million or $3 one per cent of the total loan portfolio, excluding PPP balances and classified loans increased by $1 7 million to $50 million or one 1% of the two.
On a loan portfolio, excluding PPP balance.
We fell on a classified and non accrual commercial real estate loans at par of $4 $2 million and settled a payoff of another classified and non accrual commercial real estate on commercial loans at 92 or $2 $9 million.
Approximately 32% of special mentioned balances and 10% of classified balances also received a PPP loan.
Additional detail on loans rated special mention and classified can be found on slides 22 and.
23.
Overall, we continue to believe a proactive approach to working with our customers and our disciplined credit management and diversified loan portfolio as.
Allowed us to remain strong and our asset quality to remain stable through this unprecedented time, and we will continue to serve us well into the future on.
Now I'll turn the call over to David Morimoto, Executive Vice President and Chief Financial Officer Day.
David.
Thank you Anna net.
Net income for the fourth quarter of 2020 was $12 2 million or 43 cents per diluted share risk.
Turned on average assets from the fourth quarter was 74 basis points and return on average equity was 887%.
For the full 2020 year net income was $37 3 million or one a $1 32 per day.
Diluted share return on average assets was zero quite a five eight.
8%.
Return on average equity was 685%.
Pre tax pre provision earnings by 2020 was $88 2 million compared to a $4 2 million of 2019.
2020, a pretax pre provision earnings were the highest EPS has generated since the great recession.
Our 2020 earnings were impacted by higher provision for credit loss expense due to the COVID-19 pandemic.
Additionally, in the fourth quarter, there were several one time expenses, which totaled $5 $9 million.
Net interest income for the fourth quarter was $51 5 million, which increased from the prior quarter due to accelerated recognition of PPP fee income as PPP loans were forgiven by the SBA.
Net interest income included $6 3 million in PPP net interest income and net loan fees.
There 234 million in the prior quarter.
The net interest margin increased from 332% in the fourth quarter compared.
The 319 in the prior quarter.
The increase was due to the aforementioned PPP a foam recognition the.
The NIM normalized for a PPP was 317 in the fourth quarter compared to $3 two six of the prior quarter the.
The decrease is due to the lower loan and investment yields and the supported the use subordinated debt interest expense.
Fourth quarter of other operating income totaled $14 1 million compared to 11 6 million in the prior quarter.
The increase was primarily due to a higher mortgage banking income of $1 1 million sequential quarter.
Additionally, in the current quarter, we rely on realized a gain on sale of securities of.
Zero quite a $2 million compared to a loss on sale of securities of zero quiet for a million in the prior quarter.
Other operating expense for the fourth quarter was $45 1 million, which was an increase of $8 1 million compared to the prior quarter the.
The increase was largely driven by a one time expenses totaling $5 9 million, which related to employee incentives and benefits branch consolidation costs.
Litigation settlements.
The prepayment fees and other one time expense accruals.
Additionally, in the current quarter, there was higher deferred compensation expense related to the equity market volatility.
Higher computer software expense related to our technology initiatives.
The efficiency ratio increased to 68, 8% in the fourth quarter compared to 69% in the previous quarter, primarily due to a onetime expenses.
Excluding onetime expenses of $5 9 million the fourth quarter efficiency ratio would've been 59, 8%.
Net charge offs in the fourth quarter totaled $1 8 million compared to net charge offs of a $1 3 million in the prior quarter.
At December 31 of our allowance for credit losses was $83 3 million or 183% of outstanding loans, excluding PPP loans.
This compares to one one.
179% coverage as of the prior quarter end.
The buildup of credit reserves was largely driven by the economic forecasts utilized in our seasonal methodology.
The effective tax rate was 23, 7% in the fourth quarter and going forward. We expect the ETR to continues to be in the 24% to 26% range.
Our liquidity and capital positions remain strong and we continue to perform robust stress test.
With the 55 million subordinated note offering we completed in the fourth quarter, our Cps a total risk based capital ratio increased to 15, 2% as of day.
December 31.
Thanks, and now we'll return the cost of Paul.
David in summary, Central Pacific continues to make a positive forward progress on our strategy while at the same time managed well through the COVID-19 pandemic.
We have a solid financial credit liquidity and capital position.
As the economic recovery gradually begin we remain committed to supporting our employees customers and the community and the <unk>.
Half of our management team and employees. Thank you for your continued support and confidence in our organization. At this time, we will be happy to address any questions. You may have thank you back to you operator.
I will begin the question answer session.
I'll ask a question you May press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing any keys.
Throw on your question. Please press Star then two.
At this time, a pause momentarily to assemble the roster.
First question comes from David What you sort of Raymond James. Please go ahead.
Yes.
Good morning, everybody.
Hey, David.
I wanted to start out on growth.
Exclusive of the PPP loan growth was better than expected and that was great to see and it seems like originations might be accelerating.
Just curious what youre seeing on the loan demand front, how your pipeline is looking.
Just maybe some expectations in terms of of growth near term of kind of.
The mid single digit rate a reasonable for 2021.
Yes, Thanks, David.
As ive always touched on in prior quarters.
One of the one of the biggest changes, but I think this past year has been.
We fundamentally really changed the mindset of introducing a a.
A more sales culture of naturally build them.
<unk>.
The practice of the diligence around credit of course, but.
Arnaud Martina has been really driving a lot of what we can.
Call, our pipeline management and Arnold you, probably a a good view.
On the loan growth, we can expect going forward. So maybe you can comment on that yes. Thanks to the uptake Paul we're very optimistic.
In the.
In 2021.
Although there's still a impact here on COVID-19.
And we're looking forward to better D. A.
As we move into the year and so on.
Our loan pipeline.
It looks good as does our deposit pipeline as we move into the first half of the year. So we are we're looking at.
This year.
We expect loan growth to be in the mid to high single digits.
And also the this is Paul again.
We've been very fortunate with still a very robust.
A robust Hawaii residential market.
From a lot of.
A new homeowners have been.
Quite interested in the level of services that <unk>.
<unk> the offer in and we're really gaining a lot of market share I think on especially on a purchase mortgages.
Okay. That's good color and then maybe just.
Elsewhere, where are you seeing strength in.
Like what's the within <unk>.
By segment and can you just talk about the competitive landscape and what kind of payoffs and paydowns that that assumes and then lastly, I was just kind of interesting to see the pretty pretty decent growth out of the U S. Mainland just curious your thoughts on.
The Hawaiian islands versus the U S mainland growth.
Yes, I think well before touching on the mainland.
<unk> share of locally.
Given the type of coverage, we were able to achieve the especially with the PPP loans.
Established a lot of new relationships for us.
And thats translated to a lot of new opportunities for us.
The second is the real estate again, the real estate market as I referred to earlier a third is really around this new mindset and culture that I think we have that's driving a lot on business.
Remained very competitive.
But again I think that the organization has really stepped up a lot more of an and.
<unk>.
As Arnold touched on the mid to high single digit growth going forward, we feel pretty comfortable about that.
That's the only Hawaii as Phil.
Compared to the mainline given the downturn in the tourism industry.
Have some specific challenges for this Hawaii market.
We're really hoping that.
With the vaccine and other occurred of immunity so to speak to happen hopefully in the latter part of the year on debt.
Tourists will come back and we'll be able to resume even more exciting opportunities.
Alright, that's helpful.
And then just kind of following up on your I mean, you guys were immensely successful and the debt.
PPP program and really like you said, it's driving a lot of customer acquisition just curious here.
Appetite you guys have already taken some applications just curious of your appetite for this next round of PPP and maybe kind of the volumes that you could expect out of there and whether youre focused on on using that as another customer acquisition tool.
Yes.
We did have a really good effort last year as you know.
We did about 7200 loans or over a $550 million so.
We're looking we're looking very positively.
As a.
Really.
Tailwind for us to be able to build new businesses business relationships in the market.
We have started kicking in.
A new PPP applications and this current round.
<unk>.
Steve over.
<unk> 3000 applications most of it our second draw.
Applications request.
Our team is busy working to net profit at this moment.
And this is Paul I might add debt.
We are stipulating that.
The companies coming to us with new application we.
We do want them to be customers of.
CPB and we're already seeing many companies converting the CBB as a result, many thanks to our employees, who did a great job on the first round of PPP.
So.
Absolutely David I think yes.
This is one of the few ways of bringing a new money into the the day.
We are again using technology getting the teams together to step it up to make sure that we bring more monies into the state and I think the community and our customers and prospective customers are aware of the.
Alright, thats sort of a thank you.
Sure.
Sure.
Thank you next question from Andrew Liesch of Piper Sandler. Please go ahead.
Hey, everyone. Good morning.
Yeah, Hi, just wanted to.
Talk about the consumer deferrals, you had obviously had some good comments the.
Good morning.
In the past you just referenced a maybe something trying to sort of the higher unemployment rate.
With how things have trended would have to have a lot of these concerns been been alleviated or is there anything on the horizon that you've said that you see that might give you some pause.
I'll start and then turn it to Ana for detail, but yeah youre on.
You'll have noted in the supplemental deck on slide 20, just the the improvement in the numbers for consumer deferral of and you see now that we're just at $2.3 million and 149 deferral and you compare that to where we were last year on we were at a high of one.
The over 4000 consumer deferrals.
I think the the reason or where the improvement is certainly we had on stimulus money coming into Hawaii, but the other is there is on return of of tourism and we reported earlier on on the numbers and so we do see on visitors back and.
People, even the local residents out to the restaurants, so that of course increases employment level and then the ability of a concern.
The inverse to repay on debt and on the last thing I'll share is that while we expected of the 4000 consumers that were on deferral.
You need some kind of assistance so a repayment plan and there really were just a small number maybe 300 that requested the repayment plan all of the others went back to penny per the contractual terms on the now.
Got it okay, that's really helpful and encouraging.
Thanks.
Sure.
Then continuing on to <unk>.
Mortgage banking.
That line item was pretty strong this quarter how is that pipeline.
Shaping up it sounds like Theres been some good progress on the purchase side taking market share.
How do you see that debt that business playing out for the next two quarters.
Yes.
This is arnold it looks really really good in the fourth quarter.
We had a total originations of off of.
$250 million.
Turning to face importantly, excuse me.
And that's compared to 230 yield in the third quarter. We believe the first quarter originations will be roughly 240 million.
And we anticipate the gain on sale income although the decrease.
And this is the reaches the that is because.
The spreads are starting to normalize.
And we kind of the ship.
Some of the production of the originations to our portfolio. So that's our plan for the first kind.
Going into the first quarter.
Got it and do say, a $350 million from the fourth quarter or 250.
For the fourth quarter it was.
The $354 million.
Got you great.
On one other question Arnold you referenced some new digital products and services that are looking forward to update us on anything you can.
Maybe tease us with the right now of what.
What are the things that youre looking to lunch or expand.
We know we're going to keep that.
We're going to keep that for a discussion later in future quarters.
We have some exciting things coming.
I thought that might be the response thanks for the.
Taking my questions I'll step back thank you.
Thank you.
Thank you next question from Jackie Bohlen of <unk>. Please go ahead.
Hi, good morning, everyone.
Hi, Doug.
Just wanted to start with expenses.
<unk> made tremendous progress on price 2020, and no debt.
A lot of that work has been behind you and youre going to start seeing some more of the run of revenue benefits just wondering how youre thinking about expenses on both from a baseline to start with and how that those costs are behind you, but also from just the as you continue to implement the strategies and what kind of growth we might see as well.
Kind of offsetting some of that.
Yeah, Hey, John It's David.
I'll start there.
So the fourth quarter total expenses were roughly a 45 billion.
We've discussed there was about $6 million in there.
We deem one one timer is sort of normalized basis, the fourth quarter. It was roughly a third.
The $9 million.
We are guiding to going forward as a range of 39% of $41 million.
So.
Slight uptick from where we were in the fourth quarter on a normalized basis.
And I know you mentioned that the rise of expenses are behind us on what I will state is the.
Much of the rise of expense the dollar rise expense was capitalized on it was.
A lot of it was in the ability and so while the work on rate 2020 is behind us some of that expenses as a leading into the expense forecast going forward as we start amortization.
So Jackie as we did.
This is Paul.
As we mentioned before for example, like the investment on the building infrastructure, it's amortized over 39 years, and we always take that into all of our forecast.
The other thing is that.
We were able to put in.
<unk> technologies that maybe 10 15 years ago, a use of Kaufman our metal lag now nowadays everything is cloud based on we're able to go a best in class technology.
But going forward you pay per the licenses.
But needless to say.
The license cost.
Also drive the topline and becomes a more accretive to us, especially as it gets stickier with our with our customers. So so again.
2020 of the actual investment.
Speaking of behind Us.
We're going to be recognizing costs, but we anticipate a lot of that can be very accretive for us on in terms of driving revenue.
Okay. Thank you that's.
Very helpful and I mean, I would guess that based on and I realize that this was a very long term guidance.
There is inflation on everything else the.
The variance between the 39 of 41 versus historical 36 of 38.
Spoken about in many many quarters is that primarily a M.
Organization.
And then general.
Question on compensation and everything else or is there anything else built into that.
Yes, Jack it's what you mentioned and then it's also a little bit of a.
Incremental investment.
In ourselves and further digital opportunities and strategic.
Strategic areas of our of our team.
We continue to build on it.
And invest in ourselves.
As Paul mentioned, obviously to drive a future future revenue.
But thats kind of the Delta there.
Okay. Thank you.
And then just one last one on.
The new buyback authorization just cash on your.
Give me your thoughts.
Regarding when you might look at starting that if it was more just to keep the flexibility on the table or is it something that's an act of discussion right now.
Yes.
Jackie.
Yes.
So more of the former.
We wanted to have the authorization in place.
So therefore, our use in the future.
We are not the started repurchases at this point, but.
But we are hopeful that we will be able to later this year.
It will be somewhat of a function all of a better visibility on the Hawaii economic recalls a unique.
The strengthening of our profitability.
We did get a bit of a good news on the economy. This morning on.
The state unemployment rate came on at nine 3%, which was down from mid tens in November.
The dramatically down from its peak debt, 24% in April of last year.
Now we're down to 9% so that that obviously is some good news.
Great. Thank you and congratulations everyone on having the the renovated plaza of behind you that must be really excited I guess I for one cap rate.
The it in person one four on.
I've been traveling again, thanks sure. Thanks, Jon Jaffe of just for your information. In addition to the earning supplement on our IR Web page. There is a analyst package on the rock on.
<unk> the <unk>.
By the alleviation of the bonds of.
And our new online mobile banking platform.
Okay, Great I will I'll look for that and take a look at the slides. Thank you.
Okay.
Again, if we have a question. Please press star then one.
Next question is from Laurie Hunsicker from Compass point. Please go ahead.
Yeah, Hi, Thanks, good morning.
Earnings and on.
I Wonder if I could start with you. Thank you mentioned that as of January 20th deferrals were down even further to a $101 million and.
And like I, just wondered if you've got a just.
Just a even a high level of breakdown in terms of of the 101 million with a corresponding on consumer on commercial and if you have it on on Crane.
C&I if you have it on the consumer.
Sure I'll start with residential of that came down to $53 million.
On the commercial real estate came down to $40 million.
Our C&I down from $6 million.
On the consumer came down a little bit of $2 million.
Okay. Okay.
Okay, Great I mean, your deferral of tons are fabulous.
So David maybe just a question for you is as you all sit with various of preserves X P. P P or a 183 basis points.
Is it conceivable.
Given what you've got on on loan growth, given where your charge offs are and certainly vis a vis us making assumptions around COVID-19, but is it conceivable that we could be seeing you run it in a round numbers, that's a $3 million per quarter of loan loss provision on how do you think about that.
Yes.
Yes Laurie.
As we normally respond to the question.
On the.
Quarterly provisioning is going to be a function of the economic forecast net charge offs and loan migration trend basically the performance of the portfolio.
Again, we're cautiously optimistic on the on the <unk>.
Cannot make forecast front.
Sure.
The reduction of the unemployment rate.
So.
But just going to be directionally, consistent with what we see with the economic forecast.
Our loan portfolio performance.
Okay.
Okay.
Then around NIM stripping out the P. P. P. Thank you strip out the $3 million to arrive at the 2017.
In other words of about $6 3 million of a PPP and your net interest income this quarter about $3 million.
What's sort of the immediate recognition of forgiveness I assume that.
I did it round numbers and I came up with three H and so on.
I'm, assuming that for the 317, you use $3 million of is that correct.
No we used the $6 three.
$3 million the number that's in the.
Our news release.
You use the the checkpoints rate at the sound Okay.
At the $6.
Thanks for thanks for clarifying that and then just last question.
So the three of the branches you closed were in store branches can you just remind us of your 31 branches. How many are in store branches and just how you're thinking about them for a branching.
So Laurie hi, it's Katherine.
As you mentioned.
Good morning.
We closed on three of the four in store branches and the reason for that was zone.
The in store branches were particularly on small so we were not able to provide for the social distancing, but the other one in store branch is larger and we do intend to continue to operate at that one.
Oh, Okay. So just to clarify of your total 31 branches you only have one branch that the debt.
It is in store that's correct.
Got it okay perfect. Thank you all the boxes.
Excellent. Thank you.
This concludes our question and answer session.
Now I'd like to turn on the conference over.
Mr. Paul you're on a meaning for any closing remarks. Please go ahead.
Great.
Thank you very much.
For all of you for joining us this morning and.
We look forward to.
Further engaging with all of you.
Thank you very much goodbye.
Conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yes.