Q1 2023 Preferred Bank Earnings Call
[music].
Yes.
Good day.
And welcome to the preferred bank first quarter 2023 earnings conference call.
All participants will be in a listen only mode for the duration of the call. It should you need any assistance at this time. Please signal a conference specialist by pressing the star followed by zero.
After today's presentation there'll be an opportunity to ask questions.
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Please do note that this event is being recorded today.
I would now like to turn the conference over to Larry Clark of financial profiles. Please go ahead Sir.
Hello, everyone and thank you for joining us discuss preferred bank's financial results for the first quarter ended March 31 2023.
With me today from management are chairman and CEO Li Yu.
President and Chief operating Officer, Wellington Chen Chief.
<unk> Financial Officer, Edward Shaker, Chief Credit Officer, Nick Pi, and Deputy Chief operating Officer, Johnny Shoe.
Management will provide a brief summary of the results and then we will open up the call to your questions.
During the course of this conference call statements made by management May include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Such forward looking statements are based upon specific assumptions that may or may not prove correct.
Forward looking statements are also subject to known and unknown risks uncertainties and other factors relating to preferred banks operations and business environment, all of which are difficult to predict and many of which are beyond the control of preferred bank.
For a detailed description of these risks and uncertainties. Please refer to the SEC required documents the bank files with the U S. T I C.
If any of these uncertainties materialize or any of these assumptions prove incorrect preferred bank's results could differ materially from its expectations as set forth. In these statements preferred bank assumes no obligation to update such forward looking statements.
At this time I'd like to turn the call over to Mr. Li Yu. Please go ahead.
Thank you good morning.
I'm very pleased to report.
The first quarter net income of $38.
$1 million or $2.61 a share.
We are satisfied with the result that was achieved.
During this very stressful quarter.
Quarter.
The events of March.
Truly humbled all of us and the banking industry.
Personally I'm very sad to see.
Two good sized bank.
When the way, it's just a matter of hours.
Especially one.
Both of these assets.
<unk> expertise and assistance sizable industries.
And they have been servicing are serving these industries.
<unk> fully diligently in the past 20 to 30 years.
Only to see.
Those customer at the first one or two a month okay.
In any event the whole mix.
Got us a lot.
And personally.
Personally I have the following observations.
The textbook definition of fans.
Transactional costs, bringing our core deposits.
Need to be revisited.
True.
The I'll call deposits, but only doing that.
But in.
Stressed environment.
They seem to be the first to run.
Okay.
I'm, so very pleased with a P C D portfolio.
Not because.
We know exactly how much it costs us.
And how much how long we can have them.
But.
During this difficult period.
We have not seen one P C D.
Our rent.
But the run.
Okay.
The Golden rule.
Yeah.
We're not borrowing short and land.
One invest too long I guess do you use data.
Yeah.
But I want to tell you to do this it is really a difficult process.
Throughout the year.
I don't know how many times, we have to face.
Disappointment about offices.
Knowing their loans.
Yeah.
Taking out last too.
Our low fixed rate mortgages.
But now.
As we look back.
It seems to work all the agony in order to have a better.
Patrick.
Okay.
We now must respect.
<unk>.
Regulator or government risk events.
As a banker.
If you recall in.
2021, well we are off to museums.
The country's inflation was transitory.
They'll be practical how many of us U S.
And us how many of us.
Caring for a near 500 basis point interest rate increase in 2020.
And now as managers.
Of a public traded bank.
We will face each quarter like now was the earnings.
Beat or Miss.
I can't help but think sometimes the things that may be good for a short term fix.
They may or may not.
Probably it may not be necessarily good.
For the long term health of the bank's operation and abandoned.
Yes.
I wish.
I wish all of our investing public.
For more <unk>.
More weight into the banks.
Balance sheet the consistency in the long term operation.
Having express my personal opinion now must report to you.
Deposit situation.
During the three day.
In March March nine March 11th of March 12 in March 13th Okay to three working days.
Preferred bank also experience deposits also.
The good news is we have a total of less than 10 accounts.
The pull the money out.
The bad news is that three of them is.
Very precise.
Yes.
For the quarter of deposit reduce.
By two 7%.
As of yesterday evening.
Which is.
April 18th we will have.
Deposits increased 1%.
<unk> increased 1%.
We're working very hard to gain back the deposits with loss.
Because.
Most of them.
Having a borrowing relationship with us.
But I do want to tell you that.
During the process.
We have received many many.
Heart warming phone calls from Hirsch for.
So it might be positive from our customers.
<unk> us to have faith in banking industry.
Telling us got facing us.
Telling us that we have a good balance sheet and we have good capital, especially good.
Yes.
With Dell confidence without blessing.
And that's also believe it's our shareholders wish.
We will continue to.
Maintaining a flexible balance sheet.
We have continued to maintain.
Good liquidity.
We continue.
To control overhead like we always do.
And we will continue.
To operate preferred bank with a simple.
<unk> model.
Thank you very much.
I'm ready for your questions.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
And our first question here will come from Matthew Clark with Piper Sandler. Please go ahead.
Hey, good morning.
Good morning.
First one for me just on the available liquidity the cash and the borrowings that are available one and a half billion.
Relative to the uninsured amount of deposits I think roughly half of your deposits are about two point.
Just under $2 7 billion I guess, what's the plan or what's kind of the targeted coverage you're looking to get to.
Are you looking at it sounds like Youre looking to pledge more loans, but is there something to be done on the security side too.
Knowing it's only about 6% of assets to be able to pledge those.
Thank you. Thank you very much it has to wait approach we're doing it.
Scheduled to be converted to.
To them I mean.
Oh boy.
Is that.
Uh huh.
Enhancing charen's coverage.
I mean, I see yes, okay.
And and.
Okay.
Schedule it.
For the second quarter now is libido, Iraq, right around $600 million customers.
We'll be converting them to cedar and convey named him to Ics.
That should reduce our so called unusual deposits number.
Right or wrong about the 35% to 36%.
Assuming the same amount of total deposits.
And in the meantime, we have roughly estimated a bot.
600 million additional.
Borrowing capacity from February .
Federal home loan bank is similar.
So that will also bring bring up our so called the.
Total.
Capacity of liquidity to $2 $7 billion.
$5 billion.
Two two number is.
We'll be very close.
I don't know, whether there's any importance as a parent you have to cover every insured.
Was the so called that your off.
Off balance sheet liquidity.
But I do think the most important things is.
You have to have a good operation under your customers' trust.
But we will be getting on June 32 numbers would be.
Congress to each other.
Okay great.
And then just kind of a related question.
In terms of your the incremental kind of balance sheet compensation composition going forward.
As.
You know as this.
Higher cash level likely to kind of stick around I know its above average to begin with but I guess, that's what I'm also trying to get at is how do you think <unk> borrowings were up in the quarter or is that do we kind of do your borrowings continue to increase from here with <unk>.
So some potential deposit pressure or and I guess, it's somewhat also depends on your your loan growth outlook. I mean balances were slightly lower so I'm just trying to get a sense for the moving parts of the balance sheet going forward.
Well.
Based on what I understand from the industry today and.
And based on reading, especially from you guys.
And all the other information.
I'll cede the countries of deposit.
Situation is.
It's probably more of a concern to everybody.
As compared to two <unk>.
Okay.
True.
Loan demand is down.
Buddy Who's reported every paper every every service caught it but I think the uncertainty of deposit one last what period of time.
And we at preferred bank.
We'll be closely watching the trend in the second quarter.
We're now in no hurry in putting up a whole lot of lungs, just two two extra dollars okay.
As compared to the U S versus the maintain a good liquidity and safety.
And.
Frankly, you so let me be.
Little bit funny that I think we're making enough money too.
Okay.
Whether it is.
Clearly.
Yeah no doubt.
And then just on the.
On the cost of deposits or spot rate on deposits at the end of March I don't know if you have that Ed or even the monthly average for the month of March on deposit costs as well as the average NIM in the month of March.
The net interest margin in March was 467 cost of deposits was $2 63.
Okay, Great and then last one for me just some caution cautionary commentary on office commercial real estate and in the press release not a surprise since you know everybody's talking about it but can you size up your exposure there and also give us some additional.
Details and characteristics owner versus non owner average loan size you know, what's downtown kind of considered metro downtown are more at risk.
How ltvs are you know at origination versus maybe some new appraisals, you're getting in rent rolls.
And what your plans are for.
Borrowers that renew that want less space.
I could go on.
But any any any granularity there would be helpful.
Okay, we have roughly 10% of our total loan portfolio in office properties.
Office office.
Property loans.
Bob.
Of this amount roughly $8 million is in the downtown area.
Faithfully has tried to avoid especially the Los Angeles area for the past 20 years.
And most of our office properties in the urban and suburban areas.
That you know in California, especially in Los Angeles, It's a big really suburban.
Okay. So theres a little communities everywhere basically the property there is a lot more stable.
And then the downtown area and we have $68 million in downtown area is really in San Francisco that was at least another long term lease to I think one of the famous university over there in the U S.
It is there is a oh.
How should I say.
Underwritten quite well known.
Good.
Loan to values.
<unk> ratio, probably less than 40 kilograms.
Any event, but I would have asked.
Nick to bring you up to date with with some of our underwriting feature is that we do that test.
On this chart Ballparkish.
Yeah. Thank.
Thank you Mr. Yoo Ah my feel.
Our entire portfolio at this time, our asset quality is pretty stable up today and also resilient yeah. The key thing that we use to underwrite our loans.
A little bit different as other banks have been a bit different as those regional banks, we request for too.
Major areas to be considering okay. The first is the location just elect Ms. Zhu mentioned that we avoid metro L. A downtown area and we tried to do a more office loans near debt residential needs or are some of our urban area in a theater.
Things that we need to have strong sponsorship behind it that's always our credit underwriting a major two areas other than the Nomura underwriting process.
With Oh doses trauma sponsorship.
Behind it so even though the property it has a little bit waking the casual however at their global cash flow their liquidity is very strong at this time, so we do not see any immediate.
Threat to our office product or some other sorry your site.
Fourth to further on that we don't have any nonaccrual of classifieds or even 30 to 89 days.
Uh huh.
Okay.
The office sector.
Okay. Thank you.
Okay.
And our next question will come from Andrew <unk> with Stephens. Please go ahead.
Hey, good morning.
Hi.
Maybe just following up on the last point I think it's pretty reassuring to hear that only $8 million or so that would be considered kind of downtown type office I guess.
So 10% of total loans are office properties can you size, maybe the chunky and us with them.
What's the size of the the largest one two or three type loans and me in the office category.
Well the largest two or three of them average about $40 million three of them.
And Oh average total average loan is $4 $1 million in office properties.
<unk> average LTV of 61%.
Many of them is coming in.
We are in the air.
Early days each ones is underwritten with a complete.
Underwriting process individuals, especially those larger loans.
The office building that is one of the office building in the city.
$50 million range is in one of the hottest area.
In Los Angeles is coal.
Culver City, which you have as a creative entertainment combination.
First floor upscale.
Scared that good restaurants that is bustling business the <unk>.
On the third floor is rented out to a new type of company was LC support from all.
Major back so that's that's one and also that we have.
Very rational very reasonable sponsorship behind it.
The next largest one is in he.
It is one of the beauty and the Korean com with where the owner of that.
Our range is office, we can make that office building near fully occupied and underwritten.
D D. <unk> is very very very substantial very very successful.
And it's quite it.
Is topnotch, Okay is cash flow.
Huge.
So these are the top two is you have to know okay, and then I might as I explained the third one is in a very rich area of Newport Beach.
We're a group of people bought an office building and my view of that group of people, who dealt with us for many many many years maybe project.
And a substantial group of people bought the office building.
<unk> vacated everything and it's going to demolish it.
And converted into.
Comments.
It is in the process of getting doing that so it's right now, it's really empty, but because of the nature will be coming to us at the office building.
In the office scrutiny category and also the first one is in the same category.
So okay. So these are the larger ones.
Donnelley.
Building majority of our loan is smaller ones, let's say in San Francisco downtown.
Al.
San Francisco Bay area, all the Flushing.
And Brooklyn, if you know these area.
Lifestyle and the things in those area all small commercial office unit sometime as a retail downstairs, sometimes deal, but if you know them the real estate over there he is.
Yes.
It's really good it's not like Hampton.
Okay very good I really appreciate all the extra color there.
I wanted to go back to the deposit flows.
For the quarter I was wondering if anything specifically or.
I guess, if you could quantify maybe the drop in the interest bearing demand deposits I think down $540 million or so a quarter on quarter.
Was any of that a move to time deposits or are those just.
Access out of the bank like I'm, just trying to get a sense of how much was more kind of geography across the deposit.
Uh huh.
The deposit segments versus maybe relationships loss or those that left the bank.
And do you want to answer that first okay, maybe added to it yes.
From what we know and what we've looked at Andrew it's not so much relationships as it is paring down balances and to Mr. Use point earlier, a lot of those were really centered in just a very few accounts. These depositors are clients that we call them have some form of fiduciary.
<unk> obligations with respect to their funds and so.
What they felt was their best interest they moved them out.
Following what happened with signature in Silicon Valley. However, we have been in constant contact with all of them and are working to either.
Get them into a reciprocal deposit program to bring them back or going through and going through very diligently with their senior leadership and our senior leadership and going over what we're doing is the banks to mitigate all the risks that have been brought forth through these two bank failures and so we feel very good.
About that process and what we're going through and also to Mr. Use point, a number of them have a.
Credit relationships with us and so we fully expect to have a lot of that back yes, okay very good.
To the point I think you. It was mentioned at the start of the call deposits.
Quarter to date up 1% I guess.
Within that should we expect that the bulk of that is just driven and it's driven by time deposits and I'm, what I'm specifically getting at is the D. I b.
Flows since quarter end is I feel like there's been any kind of deceleration in AR and the drawdown of an IV.
Most definitely since the end of the quarter, Andrew and that's a good question and what we've seen since the end of the quarter is really more of a business as usual I would say.
And so that's why we see the tick up 1% from the end of the quarter and obviously I think we will have much better news to report at June 30th with respect to the subject Johnny on one until you want to add to that.
Nature of deposits increase.
In the first half of the quarter.
First of all of that.
Yes, I think the nature of deposit inflows, just like Ed said business as usual for a lot of our clients.
Not.
And we're working on regaining back from the deposit loss.
But this is business as usual clients come in.
Okay.
Very good well I appreciate you guys, taking the questions today. Thanks.
And our next question will come from Garen <unk> with D. A Davidson. Please go ahead.
Hi, there. This is clarke right on for Gary Tenner quickly if I could you previously indicated you would ask regulators for approval with regard to $150 million stock buyback could you provide any color on how you were thinking about capital and the buyback right now given your valuation and your tangible book value and the potential for getting that buyback approved by regulators.
Okay. Let me, let me first of all I mean.
In order to get the regulator's approval daily.
Sure.
The buyback okay. That's the state of California with stay back.
So we have completed.
Our proxy statement, which is just just being released and then asking shareholders approval of $450 million buyback authorization.
And from that pointed out we've got a.
Our board will decide.
When how much a mom.
B will be the buyback happening and when they decided they want to do that.
Ask it the regular to approve usually it takes about at DPM takes about two weeks to in.
In the past too.
Months to approve it.
So in any event that's the process. So we are getting ourselves ready.
To do that.
In the meantime, that's from illegality aspect.
From the operational aspect is I must tell you that in the last phone call I'm fully confident that we're going to buyback.
The stock okay, because so cheap opinion.
You must know assuming.
Five two times.
23 earnings pay that's obviously.
<unk>.
The advantage for us to buyback.
We will but right now we have a bigger picture.
It's the liquidity issue.
And the so called unstable illness and the public.
Vision.
About the bands so most likely in second quarter, we will be looking very carefully and make sure that the liquidity issue is done we don't need any additional liquidity.
To do that okay.
Long term that would happen.
Obviously, one thing I'm not happy about the stock price doubled.
Okay.
We hope that's the case.
Most likely it looks like it was that was a trajectory of our stock value is concerned.
Very beneficial to our shareholders.
Got it. Thank you for that and then just in terms of loan growth for the full year. How are you thinking about it just given the economic uncertainty in fourth quarter contraction of about the first quarter contraction in balances.
Well.
Loan growth was three three dimension of situation.
Again, I cannot give you any guidance.
I truly do not know.
On the micro side, you have a reduced loan demand.
Especially right after this meltdown.
I mean credit credit crisis, so called crisis.
Changed a lot of People's investment.
All of these you see the things slow down.
Yeah.
Okay.
And.
Although the payoffs still continue and buy those familiar name you wonder why they still want to do that but to still paying us all with a 5% 10 year mortgages.
Gauge, maybe it's because it can go.
Okay.
I mean the committed.
Hi, Michael.
Again, that's something as we stand as a corporate.
Corporate strategy.
Strategy with them.
Okay.
That's the micro situation. So we really don't know.
And to me.
When the Federal reserve has.
Is indicating.
Putting the right stable versus what wizard that will spur up to investment.
I mean activity.
Of all of our customers.
And so that's that's one thing the securities.
The Mako aside is again.
Again under the current liquidity environment will we be able to get substantially more deposit like we used to do.
Okay.
The question is also how much you have to pay for it right now everybody is competing for these deposits be useless.
Okay.
So these are the things that we're facing.
You asked me in May I would tell you.
Our vision right now I have no clarity on this point.
I'm sorry.
Oh, sorry about that Youre, saying.
No im sorry about that.
And that's always true.
No worries understood.
Lastly, SBA production and demand trends it looks like you had a gain on sale of SBA and resumed selling maybe if you could just point to some of the demand trends are going on and as well as the gain on sale premiums.
Okay, why don't you want to answer the SBA.
SBA definitely.
Again, as we mentioned earlier.
There's a new initiative, we are trending very carefully.
Logically and especially doing.
Current situation. However, we are moving.
Moving forward, we do have a.
Pretty solid SBA.
Pipeline and we think that you know for small business and.
So it's something that we will continue to move forward.
Got it thank you.
And our next question will come from David <unk> with Raymond James. Please go ahead.
Hey, good morning, everybody.
Hey, good morning, maybe maybe just following up on I know you don't like.
Long question is hard to answer, but maybe just asking it a little bit different way I mean, you've done a phenomenal job actually pricing loans and getting paid for the rest of that you are taking and I get you're not having as much of an appetite for credit here, but where end demand, especially given the.
Structure in the standards on pricing that you have but where are you still seeing good risk adjusted returns.
What segments are still able to make projects pencil in.
Is it a market or geography, I'm, just curious what where are you still seeing seeing good opportunities at this point.
Well.
We are seeing right now is really.
Really.
Really not so called the category type of situation, where seemingly individuals we still have customers that they have individual customers that they have projects. They want to continue to do okay.
Right now it seems to be by the way I want you tend to see a nice side right now we don't see C&I being a big growth factor as of right now because the interest rate situation. Okay.
On the real estate side, we've seen steel project, calling on people needs to be good.
<unk> purchased.
I'll give you one so these are the individual cases, it would be subject to.
Much intense.
Individual underwriting after after month. So these are the risk return opportunity unless there's a good return.
Do it rather Jess.
A good liquidity.
Situation right now.
Long term.
As you all know there is a silver selling dollars billing dollars women's dollars of so called to see NPS for us.
The current maturity okay.
It is the report of everyone, including you that many of them will be.
It would be either the margin.
Oh.
Whatever rearrange okay.
And that traditionally if paas is any experienced future once every few years.
We face a situation that is not a lot of value changes and this thing becomes out of it we're ready to pick up a few of the re margin items.
That makes sense and so some of those C. R. E projects that you were talking about how was pricing in those types of deals work well what are you able to price those types of things that right now.
Basically in pilot phase.
Base claim based lenders are usually is prime plus.
I mean, we go up and down from time to the SaaS plus will be okay.
Okay, and then and you know you guys have been one of the most rate sensitive banks around because they've done a phenomenal job and you and I've talked about it before I'm just curious how you think about managing your rate sensitivity at this point in the cycle.
And potentially maybe taken some rate sensitivity off the table and how do you think about doing that.
We have several initiatives initiated we're doing one of them is if some of the customer wants to convert their loans into fixed rate.
We now start to consider it but the rate has to be.
I mean, except acceptable to us. Okay. So there are a number of them as being started just to try to thinking about converting one of them.
Second of them.
Almost all of our floating rate loans.
As you know that with a floor.
Currently the floor.
It's averaging over.
Over 6%.
Every day there are some older loans.
And the 4% range that newer loans in the 7% range.
Maybe five or 6% Eric here the number we can come back.
There is a so called a <unk>.
A management tool during the rate decrease environment.
That's why I think it has provided you previously it was a chart shows you're doing the re reduction time preferred bank's earning actually increases.
Okay.
That makes sense.
Yes.
I guess.
I guess just last one for me, maybe just given some potential revenue headwinds.
You know given given the rate environment rising deposit costs and those types of things obviously.
I was running incredibly efficient institution, but there are some headwinds right. I mean, you got inflationary pressures rising costs you guys are continuing to invest in the future with taxes.
Texas expansion in SBA build out and all those types of things I'm just curious.
How do you think about expenses in the near term.
And any commentary on that front.
We are continuously looking at Opportunistically.
We had previously committed to a couple of new branches of one of them is just sign the lease.
We're getting to that that basically.
Gross really have to come from the adding of the personnel.
Which is.
Continuous.
Laborious task that.
We will continue to do that as long as any upward opportunity for the expansion in a sort of like a.
Like Utah.
<unk> also has a big operation type of thing.
We hope that you will for all of the apps.
I didn't see anything right now.
Okay.
We gotta talked about like an 18 and a half to $20 million kind of quarterly run rate is that still pretty reasonable.
Yes, it probably is going to be.
'twenty, maybe just slightly north of 20, David.
Okay. Okay.
Alright, thanks, everybody appreciate the time.
Thank you.
And our next question will come from Tim Coffey with Janney. Please go ahead.
And I was wondering can you kind of talk a little bit about the brokered CD market right now and how that if that has any kind of interest at this point I mean, given the stuff that you've already done.
The conference call today.
I'm sorry, what's the question again, Tim specifically on brokered Yeah are you looking to add more or do you feel like you're you've done enough.
No no we're not looking at more we've done what we're gonna do and yes to Ms to use point and we took out the FHL advance as well I don't envision us replacing that once that matures, but obviously, we don't know the future, but given everything we know right now if things progress out the way, we expect to we won't renew that one.
Okay, but the broken marketed actually if we call them down since the since the crisis.
It has hasn't it.
And then if we start to see kind of rates rollover back half of this year.
Do you think that you'll start seeing a bigger pipeline in terms of loans.
Yes.
Well, it's kind of a rate sensitive situations under lower rates situations our production.
Is really jumping up.
Great. Okay. All right those are my questions I appreciate the time. Thank you.
Thank you.
And our next question will be a follow up from Matthew Clark with Piper Sandler. Please go ahead.
Hey, thanks.
I just wanted to get an update on kind of the health of your.
Our variable rate borrowers given that you've got 80, 85% of your loans.
All right.
<unk> seen loan yields up 300 basis points from the lows.
Wanted to get an update on.
You have debt service coverage ratios look and how you might be working with certain segment of those borrowers to kind of deal with.
The increased debt service.
The present time not that I know.
Oh, Okay, we are not having any respect I read that fab, Nick answered that you know.
Oh, just like neutral we mentioned that we do not see anything are happening at this time.
Oh, I don't have any information on that.
Yeah.
Okay. Thank you maybe just.
Got it got it.
Matthew I think it's.
A good question that actually leads me to another point I'd like to bring up but.
It's interesting as Mr. You talked about the C. MBS that cliff that's coming to one five trillion or whatever it is over the next three years.
With those assets repricing up the debt repricing up I think it's very notable that our portfolio.
Has already gone through that.
As opposed to most banks portfolios are still waiting for that cliff.
Ours, because we're 80% prime base have already seen that and to the effect to the fact that delinquencies are almost zero non accruals are almost zero I think bodes well for the fact of our credit quality in our underwriting and for the fact that this cliff that everyone talks about may not be as devastating as it.
Originally the thought.
Great color.
Good color and then just.
Just last one for me some clarification on the noninterest expense run rate outlook and I think you mentioned, maybe 20 slightly above $20 million run rate I assume that's the high end of the range Youre anticipating this year.
I would call that the middle part of the range Matthew.
Okay.
Inflation and wage inflation continues as well so.
Okay, do you want to reset that range or.
I'm good I'm good with it.
Okay, Okay fair enough. Thank you.
Yes.
Okay.
Again, if you would like to ask a question you May Press Star then one on your telephone keypad.
And this concludes our question and answer session today, I would like to turn the conference back over to Mr. Li Yu for any closing remarks.
Thank you for your interest, but it is interesting to have anybody asking about upcoming.
E prices, especially in this office building area.
But I want to I will not recall my personal experience seems to be less for you first started was retail.
That.
The big problem that we would have in the electronics.
Yes.
Merchandising and then of course pandemic MD and hospitality situation comes along.
So then probably a combination of something and now obviously, it's office reading them in there.
Although it sounds funny it looks like the flavor of the year.
But in any event.
Last two one.
We are fortunate that our underwritings.
Standard underwriting procedure as we previously explained to you how do we underwrite our hotels underwrite all our retail space.
Avoided.
The more situations, we emphasize on the neighborhood center.
So everybody needs every day.
So.
I hope this time knock on wood would be equally.
Hey.
Equally as fortunate.
With the office portfolio, Okay. Thank you very much.
It's truly be a very very eventful quarter.
In Q4.
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