Q3 2022 BankUnited Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Okay.
Ladies and gentlemen, thank you for standing by and welcome to the Q3 2020 to Bankunited earnings call.
At this time all participants are in a listen only mode. After the speaker's presentation.
I'll answer session to ask a question during the session will need to press star one on your telephone.
I would now like to turn the call over to your host Susan Susan Greenfield Corporate Secretary you may begin.
Thank you Kevin Good morning, and thank you for joining us today on our third quarter 2022 results conference call on the call. This morning are Raj Singh, our chairman President and CEO , Leslie <unk>, our Chief Financial Officer, and Tom Cornish, Our Chief operating officer before we start I'd like to remind everyone that this call may contain forward looking.
Statements within the meaning of the private Securities Litigation Reform Act of 1995.
The company's current views with respect to among other things future events and financial performance any forward looking statements made during this call are based on the historical performance of the company and its subsidiaries or on the Companys current plans estimates and expectations.
This forward looking information should not be regarded as a representation by the company that the future plans estimates or expectations contemplated by the company will be achieved such forward looking statements are subject to various risks and uncertainties and assumptions, including without limitation those relating to the company's at.
Operations financial results financial condition business prospects growth strategy and liquidity.
As impacted by external circumstances outside of the company's direct control.
The company does not undertake any obligation to publicly update or review any forward looking statement, whether as a result of new information future developments or otherwise a number of important factors could cause actual results to differ materially from those indicated by the forward looking statements information on these factors can be found.
In the Companys annual report on Form 10-K for the year ended December 31, 2021, and any subsequent quarterly report on Form 10-Q. Our current report on form 8-K, which are available at the SEC's website Www SEC Gov with that I'd like to turn the call over to Raj. Thank you Susan.
Welcome everyone to our earnings call and thanks for joining us.
Let me start by just highlights of the quarter net income came at $87 9 million $1 12 per share a 937% increase in EPS ROE came in at 13, 5%, they're very happy with those results.
This growth in earnings really driven.
NIM expansion.
I'd like to remind everyone that we're not very asset sensitive a little lack of sensitive.
But we're I think we're writing business at better margins, which is helping and of course, a slight asset sensitivity is also helping so our margin expanded by 13 basis points compared to last quarter.
Fix this quarter last quarter, we were at $2 63, and if I remember well third quarter of last year, we were at <unk> 33, So nice trajectory there our core C&I and CRE.
Businesses grew by $444 million. This quarter. This was partially offset by declines in mortgage warehouse.
Which is.
Slight decline in clinical Enbridge as well for mortgage warehouse declined a.
A little less than $200 million I think of utilization now is at historically low levels.
Given everything Thats happened in the mortgage origination business.
Consistent with our system wide trends.
And the fed tightening deposits declined by 1 billion won.
Our noninterest DDA declined by $851 million.
But at DDA.
Now it still stands at 32% of total deposits I would like to remind everyone that this.
This journey of building Ni DDA, which is like five years in the making now when we started on this journey, which was let's say going back to 2017, our DDA balances were just 14% of our total deposits even before the pandemic, which was let's say the end of 19, we were only at about 17 five.
5%.
And today, we're at 32 I don't like seeing these declines happen, we'll talk a little more calm will get into the details of where this is coming from a large part about half of it is coming from one particular business line.
Shed some more light on that.
Despite that for this year for 2022, if you're speaking Nick on nine month view.
<unk> is down by $182 million because in the first part of the year, we were growing DDA. This quarter, we shrunk overall cost of deposits came in at 78 basis points again.
How fast is the fed hiking.
You should expect us to keep climbing up I think last quarter, let's see we were at 30 basis points from 30% to 78 basis points now.
Really quick the last week.
This quarter, we were hit by Hurricane Ian.
Happy to report that there were no significant damage to our facilities our people are all safe.
And we are reaching out to our customers who might have been impacted so far the information that we've compiled we don't expect a material impact on credit having said that we did put $5 million into our provision just in case.
The next few days and weeks roll on you might have.
Credit here or there for tax purposes, we did take a $5 million provision that's included in our numbers.
We're not seeing any systemic credit issues were.
We're looking very hard turning every rock quantifying any issues that they might be out there because as the economy slowing.
It's natural to be.
To be very very careful.
But so far we really have nothing to report it back all criticized classified loans continue to decline.
This quarter also.
It was a very healthy decline of a $175 million.
The.
Excluding the guarantee portion of our SBA loans, the NPL ratio stood at 32 basis points, which is of a small uptick from prior quarter.
And annualized net charge offs for the nine months not this quarter. This quarter was a little bit for the nine months.
At 16 basis points that compares to 29 basis points of net charge offs for last year. So we're happy about that credit as well.
As you already know we did the board did authorize another $150 million buyback sometime mid September .
<unk> executed about $11 million of debt already through the end of the quarter and continue to we'll continue to judiciously execute on that as time goes on.
So.
If you take all the buybacks that you've done so far through the end of September I think the number comes to about $337 million.
In terms of quickly updating the guidance that we've given you.
Expect loan growth for the year to come out at about mid single digits, driven again by C&I CRE by the way CRE was a positive quarter, which is which as you know we have not said that now in many many quarters. So.
We finally have it's not a very big positive, but it is a positive quarter and we were very happy about that we're now sort of.
Collected onto the other side of mouse growing CRE.
C&I, Phil will be the largest driver of growth C&I small business middle market lending all doing well pipelines are very healthy.
In terms of deposits I think deposit this will be a challenging environment I expect deposits this coming quarter. It could be okay under pressure somewhat both ni DDA and total deposits and cost of deposits will climb as the fed keeps.
Tightening.
Expecting about 75 basis points here in a few days and then another move in December so.
Having said that margin.
Overall, it should still we're still positively revised when it comes to margins. So yes deposit costs will go up but.
Our yield on assets loans and Securities will also go up overall, we still think there is.
There is a room for margin expansion in the fourth quarter.
In terms of overall that usually actually start with this talking about what you're seeing in the economy.
<unk>.
My comments will be very similar to what I said last quarter, which is that we're cautiously optimistic we're looking very hard to see if there any cracks anywhere, but we're not finding that we're talking to our peers, we're talking to smaller banks bigger banks non banks, we're trying to see where travel a little in March but we're not seeing it yet having said that we're not sitting and assuming that everything will be <unk>.
We are taking a view that long term there will be a significant slowdown.
And sometime next year, we just have to be careful.
So this is not a time to be very brave and aggressive.
But be a little cautious so.
On a scale of one to 10 that I described on the <unk>.
Last quarter, we stay about the same where we were around six in terms of cautiousness and optimism and we will keep revising it as more data comes along.
But Florida is doing very well and we're very thankful that the hurricane missed us for the most part let.
Let me turn it over to Tom <unk> got into a little more to that loan to deposits great. Thanks, a lot Roger.
So driving a little bit more into the long number as Raj said the core C&I increased segments.
<unk> grew by $444 million for the quarter were $375 million coming through C&I and $69 million coming from Cree. It was the.
First create increased as Raj said that we've had.
Some time, we were happy with it.
On the C&I side, it's kind of a continuation of what we have seen all year long.
Which is strong growth strong growth in commitments and pretty broadly based across all industry sectors. If you look at some of the supplemental.
Information that Leslie is provided and you look kind of industry by industry.
It's pretty broadly based across six or seven major industries.
Largest ones that we have exposure to so we were happy with that growth for the quarter again.
Increased segment the largest growth that we had was in the industrial area, which is an area that we have been focusing on increasing our industrial portfolio was $89 million of growth in the industrial base. So we were also happy with that C&I commitments grew by six 6% quarter over quarter we.
Did have.
We thought it would be just slightly better, but we did have a few.
Loan closings that got delayed at the very end of the quarter.
Florida due to the impact of Ian that pushed into the fourth quarter.
On the mortgage warehouse side as Raj said, it did decline by $194 million at.
Pretty historic low utilization rates in response to the macroeconomic environment around the residential real estate business.
It's a cyclical business, we recognize that we like this business remained committed to it.
Our overall client base is strong.
The group, there's been no deterioration in the client base, but.
We can't outrun the cycle.
Right now in that business.
In the aggregate, we saw a runoff of about $77 million and Pinnacle and bridge we continue to.
Struggled to find the right profitability opportunities and margin opportunities in that business and given that we've got good core growth in other areas.
We're being selective in those segments to make sure that they are profitable for us and help us what we're trying to accomplish as we look forward into this quarter.
C&I on crude pipelines.
Look strong we're already seeing good growth in the quarter. So overall im optimistic about kind of core growth in those markets heading into the fourth quarter from a deposit perspective as Raj mentioned total deposits declined by $1 1 billion for the quarter of which $851 million was ni DDA and <unk>.
Significant portion of the deposit outflow business, we saw in the quarter and commercial was related to businesses in the residential real estate ecosystem.
About half of the Ni DDA run off for the quarter was related to clients in the title insurance industry.
Made over the last few years, a major investment in this segment.
<unk> balances can be cyclical as well, but I would say a good part as we've continued to add new relationships.
Theres not a lot we can do about the decline in activity in the residential market. So we have a client base. There that we see average balances per account down theres not too much we can do about that but the addition of new account business has been.
Very encouraging our new account business in the title industry is up 25% this year over last year and in general we see very strong new account growth across all areas of the bank. I think you can also see that reflected in service charge income, which year over year was up 13% in the quarter over quarter.
Was up two 8% so given the environment.
Increased earnings credit rates and things like that to be up over in service charges. I think is a good reflection of the fact that we're continuing to generate a lot of new opportunities for new account business throughout the bank.
Saw some general decline in the corporate book.
Deposit base over the quarter that was really kind of all episodic.
Real relationship losses, but you may have had a dividend recap or a large insurance company pay.
Reinsurance cost store.
Other things that were not related to any account loss opportunity all of all of the areas, where we saw some account rundown in the corporate business.
All really reflective of sort of transactions.
Within longstanding accounts, where we have kept those relationships. So we're not.
Overly concerned about that and for the most part that's growing back.
We also saw some decline in municipal deposits for the quarter, which tends to be kind of seasonal as you come into that municipal deposit quarter overall, the loan to deposit ratio ended the quarter at <unk>.
89%, So I will turn it over to Leslie to get into more details about our quarterly results.
Thanks, Tom.
Consistent with consistent with the guidance. We gave you at the beginning of the quarter. We did see demand increase this quarter to $2 76 from <unk> 63, the yield on investments increased to $3 12 from $2 12. The duration of this portfolio is very short rate at two at September 30th.
Yield on loans increased to 411 from $3 59, and all of US we saw resetting of the coupon on variable rate instruments, new production, new securities purchases at wider spreads and higher rates drove that increase.
Cost of total deposits was 78 basis points for the quarter up from 30 basis points last quarter. We have added some term in the deposit book, we did that intentionally time deposits grew by $976 million in the third quarter. We took advantage of the opportunity to lock in some term in the deposit book in a rising rate environment.
Total deposit beta for the year is at about 20%, 29% about 46% for interest bearing deposits only.
Compared to the peak of the last hike cycle, where our total deposit beta was about 61%.
Continue to expect data to be lower this cycle.
In part because <unk> represents a larger portion of the book and I'll draw your attention to slide six in our deck. When you have a chance to look at it where you can see that deposit costs are.
By all categories lower today.
September 30, with a fed up or down to 325 and they were at 12, 31, 19, where the fed up our bond of 175 and I get that we're still midstream in the hiking cycle, but I still think that supports our expectation that <unk> will be lower this cycle than they were last cycle.
Got it.
As Raj said, we do expect NIM expansion in the fourth quarter, probably not quite as much as we saw in Q3 that we can expect the NIM to continue to expand even if we have some amount of additional ni DDA run offerings.
We hope doesn't happen, but even if it does we still expect the NIM to expand.
That reserve in the provision and the reserve as a percentage of allowance were flat to the prior quarter at 54 basis points, not really seeing any deterioration in credit of note.
And as Raj mentioned, the qualitative ACL includes $5 million related to the potential impact of Hurricane Yang.
Non interest income and expense I'll hit on that real quickly. The main reason for the increase in noninterest income compared to the prior quarter was really the Mark we took on some preferred stock investment in the prior quarter and that did not recur. This quarter. So just comparison quarter over quarter and Thats. The main reason for that area.
Increases in non interest expense were primarily in the comp and technology lines as we've been guiding to all along as we invest in both people and technology to support our future growth and business strategy and technology, we're making investments in digital and payments.
And there's certain aspects of our infrastructure, particularly around data migrations I will say that back at the beginning of the year. We gave you guidance of an increase in expenses of mid to high single digits, and that's exactly where we're coming in and Thats exactly where we expect to land I will point out in that other noninterest expense.
This line Theres, a $2 $3 million charge in there related to a write off of a specific technology investment or we just decided to go in a different direction.
So that kind of imply that that line item for this quarter.
And I will turn it over to Raj for closing comments.
Thank you Leslie.
I will actually open it up for Q&A I know, it's a busy day and I. Appreciate all of you joining us, but let's go into Q&A.
Ladies and gentlemen, if you have a question or comment at this time. Please press star one on your Touchtone telephone, we will pause for a moment, while we compile our Q&A roster.
<unk>.
Our first question comes from Ben <unk> with hardly group your line is open.
Hey, good morning, everyone. Good morning, John .
I was curious if we could start on the expense base.
Yeah.
I know you said that there was a write down or write off on one item, but when you think about that.
The base overall.
Again pretty solid guidance beginning of the year and it's held through.
So that mid single digit upper single digit range, but when you think about this year relative to potential next year are you pulling forward any investment and I know you haven't given complete guidance for FY 'twenty three but when you think of the trajectory.
Or is it something to expect a similar range for next year or is this just kind of pulling forward expenses.
I wouldn't say, we're pulling forward expenses.
But im not I don't think were prepared at this point to give any 2023 guidance wearing just kicking off our budgeting and business planning process. So I would be.
I think that.
Hold on that one until our next earnings call because whatever I say online independent eat my words in one direction or the other so you get a hold off on 2023 guidance.
Good luck.
It's.
300, plus happened yet reached a consensus.
We're still debating exactly.
How we're going to plan for next year. So we'll have a better view in about four to six weeks and we will probably share that only in January but yes, but.
But I don't think theres been a conscious attempt Paul anything forward.
Yes in answer to that part of your question backwards.
Yeah, that's fair, Okay, well that's good.
Yes.
I figure I'd take a shot at it but.
Good morning, Matt.
Yeah, when you think of loans in general it's good to see the CRE rebound.
Hopefully that trend continues higher.
When you just think broadly speaking.
I know that there's the initiatives kind of outside the initial footprint. Historically you guys did the north, Florida, and Atlanta potentially have something in the works and in Texas, and then medium term, but when you think about the footprint and mix are there any areas where you're consciously.
Targeting either from a price perspective, or do you think that there is a niche.
You could actually make some hay.
I think it's.
But we didn't talk much about.
In our comments, we didn't say much about Atlanta.
Which has been a big focus for us this year.
I will give you an update that we have hired all but one open position great because only one open position left which is a junior level position, but all of the senior people, whether it's C&I CRE credits underwriting its treasury.
Services, everyone is in place.
And we have booked a fair amount of business that we don't disclose geography geographically where.
The numbers breakout, but it is exactly on track with what we thought we would be able to achieve a number happy with the very early success we've had.
Dallas, which is a different strategy is also on track again deposit only not loans, we have been doing some work trying to understand the.
The lending side and in Texas.
But it's something we want to play and when we want to do that we don't have a decision on that yet.
We've been out there to the market we've met a lot of participants and we will have a view will hopefully in the next three or six months exactly what we want to go beyond if anything also we're looking at some other markets.
And you won't be surprised by them, they're not going to be out in Ohio.
The west coast or something it's going to be somewhere in the eastern seaboard.
Markets that we may already be servicing a little bit out of.
Florida or out of New York.
And those markets.
We will probably be the next step, but like I said, we will we will.
We're deliberate and taking these steps we just don't jump in I wanted to make sure Atlanta is off to a very healthy start before we talked to you about something else, but sometime next year, we might introduce into the market.
But that.
It is really what will drive growth over and above of course.
Florida is doing by itself being so healthy.
And when we're not seeing growth is in places like like bridge.
Tom talked about we're looking at.
The best places to deploy capital and wherever we don't find the good risk reward.
Takeaway capital and refined investment in places, where we do see a better return.
Yes, I might add from a product perspective since you asked that I think as you look across the southeast from Acree viewpoints.
Clear that the fundamentals are very strong in industrial which we had a good quarter in industrial <unk>.
<unk> and <unk>.
Grocery anchored retail that is predominantly service oriented.
<unk> population shifts and really all of the southeast markets from a multifamily perspective are very strong. So I think as we think about our plan going forward.
Those are probably the asset segments.
Categories, where we will look to increase.
Portfolio, and we think in Florida and in other parts of the southeast is always a question about where the Florida and southeast or not but.
Included for now.
Thank all of those asset segments are.
Good quality opportunities for growth near term and in 2023.
Gotcha I appreciate all the color.
Appreciate everything thanks, guys.
Excellent.
One moment for our next question.
Our next question comes from Brady Gailey with <unk>. Your line is open.
Hey, Thanks, Good morning, guys good morning Brady.
So it was a big move up in the bond yield of 100 basis points linked quarter. I know you have the short two year duration, but was there anything.
Onetime in nature impacting that and how you think about that going forward I am guessing we could continue to see a decent amount of upside there I think.
You're right I don't know that it'll be a 100 basis points every quarter, but.
But yes, I think we will continue to see that go up and no. There was nothing unusual that really drove that its just purely.
Coupon resets on the variable rate portion of the portfolio, which.
Which is the majority of the portfolio.
New purchases of hires.
Our spreads.
Yes spreads.
Our operating across the board anything youre buying spreads are better.
So it's not like we're growing the portfolio by leaps and bounds that's not what is causing the 100 basis points. Most of that is because it's a short portfolio. That's short duration bond portfolio and when rates move as aggressively as the fed is moving definitely see that and you'll see the benefit.
Yes.
Alright that makes sense.
And then my next question is on the buyback you guys have been a huge repurchase or of your stock over time.
It slowed a little bit in the third quarter, you only repurchased about.
Under half of 1% of the company. So should we think about the buyback.
As <unk> kind of a good new run rate or do you think youll be more active you have been historically.
I think we ran out of our buyback middle of the quarter, if I remember well in the early clearly in the quarter and then and then we got another authorization much later in the quarter. So sometimes the timing of board meetings and stuff.
Gets underway.
So we're in the market even now we're under are can be five one kindle default plan. So we're executing we have said that we will be.
Even more optimistic.
Given the volatility that we're seeing.
Market, but we're so net net or buyers of our stock.
We have the excess capital to do this.
As you keep creating capital.
Probably a bit more.
But we do have 150 at a time so.
We have already two weeks for.
For Middle of September end of September we did $11 million.
So that's a decent healthy because of the stock was weak at that time.
And.
So it will depend on where the stock trades.
Trade that would be.
We will be opportunistic and I do think in times, when we expect that the market might be volatile, where perhaps a little bit more opportunistic in our approach and in times, where we don't think those opportunities are going to arise.
Okay.
And then finally for me.
Optically if you look at your reserve.
And if you back out the mortgage warehouse lines I mean, it's running.
At 55 basis points, which relative to peers.
But are there some adjustments we should make their like backing out maybe some low risk mortgages or are there any adjustments that you will make that ratio higher.
That's a good question I think the mortgage portfolio overall, which is a big slug of that portfolio carries a fairly level reserves theyre not zero, but I think it's disclosed in our slides I think it's like 11 basis points or something like that very low reserves. So that's just an extremely high credit quality portfolio.
Hi Fi goes very low ltvs almost no historical charge offs. So that part of the portfolio carries a very low reserves panicle carries almost no reserve that's an industrial grade portfolio. It really shouldn't be here I'll, let we can't get away with that so we have to put something on it.
Thank you.
Our credit portfolio.
The ltvs are sales favorable that even in the event of default it throws off a very low LGD. So I do think there is a lot of we're also in an economy in a geographic area is easy to talk about these macro GDP and unemployment numbers, particularly in the Florida footprint economic trends in general.
Alright, Thanks are still very strong so all of that weighed on the blunt instrument that just comparing our reserve level to that of other banks. The biggest adjustment that I would think you.
You should consider is looking at the size of the resi book.
It is outsized compared to other banks and it is a jumbo portfolio with a very very pristine credit.
That.
A large part of it also is the government guarantee the Ginnie Mae project zero right because your reserve so that throws off the numbers in clinical which is about $1 billion of another one.
Warehouses actually small now.
Yes, so so I think yes.
I think you have to consider what's in the portfolio.
When you.
Kind of broad based comparison to peer averages.
There is no credit card and there is no auto inherent there's very little leverage lending and merits a pretty.
Loan losses, historically tended to be episodic not systemic.
Yes.
So.
Okay, great. Thanks for the color guys.
Yes.
One moment for our next question.
Next question comes from Stephen Scouten with Piper Sandler Your line is open.
Thanks, Good morning, everyone.
First of all yes, we don't claim Florida in the southeast of the Georgia just to note that.
One question on <unk>.
Securities yields I know Brady's question, you answered most of mine, but can you remind us how much of that portfolio. I know you said the majority.
Is variable rate lending.
Ballpark.
Yes, somewhere between 65% to 70% range.
Okay great.
And then on the new loan yield front I think it was around four 3% last quarter, where are you guys seeing new loan yields this quarter and im calculating around like a 35% loan yield beta give or take is that does that feel like a pretty good number moving forward for what you expect to see.
On average for the quarter, new loan yields were about.
In the quarter now much lower at the beginning of the quarter than at the end because obviously, we saw rates and spreads and there is a lot during the quarter, but on average that's what came on.
I don't know how you guys calculate loan betas to be honest, it's not a term that I've ever felt.
Really embraced.
But.
Yes, what I would maybe add to that is when you look at the kind of core portfolio today.
A.
C&I inquiry perspective.
The vast majority of new originations are floating rate.
Originations. So if you if you looked at our Cree, that's not different for C&I than it's historically been but if you looked at the <unk> portfolio four or five years ago, we were taking more on balance sheet right.
Risk in smaller cream loans today, the majority of the loans that are either floating or floating for us and swapped to fixed rate for their clients.
So our fixed rate exposure on new originations.
Pretty minimal today.
Sure.
Thanks Lee.
A lot of hard work over the years in terms of changing.
<unk>.
To what just described right going from a fixed rate to a floating rate shop.
That has been also a three year four year transformation slowly changing the business to be that.
And that is helping us today.
And Raj that meets kind of my last question just at a high level I mean, the bank is vastly different today than it was four years ago. The deposit base is different.
We run down the multifamily different loan composition, what would you say like as you look forward is kind of the biggest differentiator is the biggest.
Quality that you guys have today that will reach its success moving forward as you see it.
If there are clients love us.
I don't know how to actually put that into the ratio or show it to you with financials, but that is what matters more than anything else.
That our clients come back to us for repeat business, we don't lose clients. We don't we may loose of a price in something stupid like that but we never lose them because somebody's.
Okay.
I'll give you an example.
I am on a board of a nonprofit.
This non profit has raised some debt and.
The market, obviously, bankunited is not going to be participating, but I happen to be sort of running that process and I am looking at the incumbent bank.
And the CFO office organizations at Tommy I wish. These people were just really easy to deal with it will be so much better if we just do business with them, but they make our life miserable.
And without naming the incumbent bankers that we're talking about but just listening to that you would never hear something like that if I think.
That's really the competitive edge.
We would not be Universal bank, we can do everything for everyone. We do a few things for a few people we know our spots, but when we do we said about the clients we're advocates for our clients.
And we build that trust over a long period of time.
And that's really the differentiator it sounds very simple and straightforward, but trust me, it's not easy to do in this business yes.
I would link.
Part of reason why the clients Love US is I think we have over the last few years created a culture in the organization. The talented people continue to join us from other organizations that have great client relationships.
Appreciate it.
The culture and entrepreneurial ship that the organization has and drive for innovation.
<unk>.
The values that our company has.
That's also something we couldnt.
Express in a ratio, but if you if we think internally what we have done.
Under the principles of Rogers set forth I think talented people want to be part of this company and that's a that's a big advantage.
Got it very helpful. Thanks for the color I appreciate it.
And I'm not showing any further questions at this time I'd like to turn the call back over to Raj.
I know, it's a busy day, if somebody had actually told me. This morning, but there were 18 banks that were releasing earnings so I'm not surprised that there were a few questions.
We're here.
Are both Leslie and I and EBIDTA Murphy are available to take any questions if they come up.
Today or tomorrow or whenever but we appreciate you joining us and giving us time.
So look forward to talking to you again in 90 days Thanks, Mike.
Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.
The conference will begin shortly.
So raise your hand during Q&A you can dial one one.
[music].