Q2 2019 Earnings Call

[music], good day, ladies and gentlemen, and welcome to the W. S S.

Financial Corporation second quarter 2019 earnings Conference call.

At this time all participants are in a listen only mode.

Later, we will conduct a question and answer session and instructions will follow at that time.

If anyone should require any assistance during the call. Please press star and then zero Touchtone telephone.

And as a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference Mr. Dominic can you sell Chief Financial Officer, Sir you may begin.

Thank you Amanda.

And thanks to all of you for taking the time to participate on our call today.

With me on this call are Rodger Levenson, President and CEO Art, BACE Chief wealth Officer.

Steve Clark, Chief commercial banking officer, and Rick Wright, Chief retail banking officer.

Before Roger begins with his remarks, I would like to read our safe Harbor statement.

Our discussion today will include information about about our managements view of our future expectations plans and prospects that constitute forward looking statements.

Actual results may differ materially from historical results for those indicated by these forward looking statements due to risks and uncertainties, including but not limited to the risk factors included in our annual report on Form 10-K , and our most recent quarterly reports on Form 10-Q as well as other documents, we periodically file with the Securities and Exchange Commission.

All comments made during today's call are subject to the safe Harbor statement.

With that read ill turn the discussion over to Rodger Levenson.

Thanks, Dominic and thank you to everyone for joining us on the call today.

In our first full quarter since the closing of the beneficial acquisition, we posted solid core operating performance with core earnings per share of 88 cents core or away of 1.57% and core return on tangible common equity of 16.9%.

As year over year and linked quarter comparisons are impacted by the timing of the beneficial closing on March 1st we have provided in earnings release supplement which is posted on our website.

The supplement includes additional details on our financial performance.

A reconciliation of GAAP to core results for key operating metrics and an update to our full year 2019 outlook.

Our results included the impact of $13.6 million, a total credit costs.

As detailed in our previously released 8-K, the primary driver of credit costs related to legacy, which vis existing nonperforming cnine loans, where episodic events occurred during the month of June impacting our updated impairment analysis.

Approximately 90% of the $13.2 million in net charge offs recorded in the quarter were attributable to those these two loans.

Overall, our credit metrics remain stable and our exposure to the specific industries, where the losses occurred is modest and manageable.

As noted in the supplemental materials, we've updated our outlook for full year credit cost to $30 million to $35 million.

Also during the quarter, we purchased 193888 shares of our stock.

With the completion of a full quarter of operating results and continued cap strong capital levels Weve updated our 2019 capital plan.

This includes increased buybacks in the second half of the year utilizing the stronger than anticipated capital levels and excess liquidity from the beneficial combination.

We intend to continue to be buyers of our stock at current or higher prices up to the remaining amount of our previously board approved share repurchase authorization program of just under 2.9 million shares.

In addition to our operating performance we are looking forward to the final major milestone of the beneficial integration.

Teams from throughout the company have worked diligently to position us for a successful systems integration and brand conversion for the weekend of August 24th and 25th.

The entire company is looking forward to moving from integration planning and implementation to the business execution and realization of the significant long term opportunities of our combination with beneficial.

In summary, even with the elevated credit costs, we posted a solid quarter and first half of 2019 and remain well positioned to achieve our full year goals, including a 1.50% or away.

Now I will turn it over to Dominic for additional commentary on our financial performance and full year outlook.

Thanks Roger.

Good good afternoon, everyone.

And our first full quarter of combined results, we made meaningful progress in the transition of our combined operating model across the organization.

Core operating profit for the quarter demonstrated continued strength in our overall business performance and meaningful progress and momentum towards our long term expectation post the combination with beneficial.

This quarter, we recorded $15.8 million of restructuring and corporate development costs consistent with our originally modeled expectations. As a reminder, these costs are excluded from our core results.

In May we began executing on our branch optimization plan with the sale of five outlying branches.

And $178 million in customer deposits to the bank of Princeton at a premium of 7.37%.

This transaction premium was recognized in conjunction with the day, one accounting of the transaction.

20, additional branches will be consolidated during the conversion weekend with the remaining five over the next year or so.

Excluding the sale customer deposits increased $91 million or 4% annualized for the quarter and we expect to deliver on full year expectations are flat to slightly decreasing growth.

In addition, we are making progress on our balance sheet migration towards additional relationship base higher yielding see an i. loans and returning the portfolio mix from the 38% of Cnf at transaction close toward the above 50% mix prior to the acquisition.

Notably in the quarter, seeing I grew $76 million or 9% annualized.

Coinciding with $47 million of purposeful run off in our 1.27 billion non strategic loan portfolio comprised of held for investments residential mortgages almost all acquired from beneficial.

Along with student and auto loans also acquired from beneficial.

This additional run off of combined.

This additional run off combined with higher pay off in our CRT portfolio, resulting from refinancing the current interest rate environment.

Lands, our full year expected loan growth in plus or minus zero percent growth.

NIM for the quarter was a robust 4.68%.

And when excluding 22 basis points of incremental accretion, resulting from loan payoff above our originally modeled expectation.

NIM was slightly above the range outlined on our first quarter earnings call.

When excluding all of the beneficial purchase accounting accretion net interest margin was a very healthy 4.09%.

On a pro forma comparative basis. This was a resilient 11 basis point improvement year over year, and a five basis point increase over prior quarter.

Both resulting from the successful balance sheet optimization stronger loan yields and low deposit betas.

For the second half of 2019, we anticipate net interest margin to be in the range of 4.25% to 4.35%, including approximately 35 basis points of originally modeled purchase accounting accretion from beneficial.

This range includes a 50 basis point decrease in both prime and LIBOR by year end.

Negatively affecting the second quarter range by 10 basis points.

A deep additional detail on actual and anticipated net interest margin or in the supplemental materials posted on our website.

Core fee income increased 19% year over year with 7% organic growth diversified across all major businesses, including traditional banking and wealth with notable growth in mortgage banking and cash connect.

The growth rate is anticipated to slow somewhat in the second half of the year as we align pricing and features across our products as part of the integration strategy.

The core fee income ratio of 25.3% for the quarter should maintain in the 25% to 27% range for the second half of the year.

As Roger mentioned, we continue to see positive and healthy leading indicators in the loan portfolio and as such see the second half of the years total credit cost to be around 25 basis points with loans consistent with our original full year outlook.

Non interest expense of $92 million for the quarter combined with strong net revenues delivered a 55.7% core efficiency ratio, which is consistent with the first quarter results.

Demonstrating that we are on pace to deliver the pro forma cost synergies.

Ahead of our year, one expectations of 50%.

And on pace to deliver 90% of cost synergies by the calendar year 2020.

The full year efficiency ratio for 2019 is expected to be around 57%.

While the effective tax rate.

21.9% in the second quarter was favourably impacted by the higher stock based compensation activity.

Our full year expectations for the effective tax rate continues to be in the 23% to 24% range consistent with our original outlook.

While while another expectedly noisy quarter consistent with Roger's comments, we're pleased with both the results and the trajectory of the business and remain on track to deliver a full year core ROI of 1.5%.

We are happy to answer any questions you may have at this time.

Ladies and gentlemen, if you do have a question at this time, Please press star and the number one key on your Touchtone telephone.

And if your question has been answered or you wish to remove yourself from the queue. Please press the pound key.

Our first question comes from the line of Austin Nicholas of Stephens. Your line is open.

Hey, guys good afternoon.

Hey, Austin.

Hey, so I appreciate the updated NIM guidance.

In the supplement I guess, maybe could we maybe walk through the call. It 15 basis point step down from the core four Onein a NIM that you reported this quarter to get down to the kind of 394 in the back half of the year and then maybe just some help on how we should think about the the the trajectory of that in terms of maybe where we're where we're exiting the year at.

Sure. Thank you Austin.

Yes, as we mentioned in our conversation just now that we do anticipate the rate environment to negatively impact our rates for the second half of the year by 10 basis points.

In addition, we do anticipate some additional deposit costs as we align our product pricing across our combined customer base.

So it's primarily those two drivers that are resulting in the second half of the year being a 3.94% or in that range.

Okay and would you I guess would you anticipate more pressure in the third versus the fourth.

I'm just trying to sell it.

I understand maybe.

You know that the cadence of the step down if if in it.

And if you could if you could make any comments on that.

Sure and just add some clarification, the 50 basis point decrease in the rate environment as expected with 25 basis points in the month of July at the end of the next fed meeting and then another 25 basis point decrease in September .

As consistent with market expectations say, obviously that is all subject to.

Data and further expectations, but you would anticipate because of that that there would be some step down in the third quarter with additional step down in the fourth quarter.

Okay.

That's that's that's helpful. And then and then maybe just on the fee income guide can I confirm that the guidance is really using the call. It 138 million core number from 2018 and then when we think about the 2019 number will we're backing out the beneficial fee income which is.

Amounting to something in that $14 million to $15 million range for the full year is that the way to think about the the guide on the fee income.

It is so we are normalizing for the growth from beneficial when we talk about the fee income growth to be more organic based.

Okay.

That's helpful. And then I guess, maybe I appreciate deficiency guide that you had that you highlighted but any commentary specifically just on how we should think about the run rate on expenses in the in the third and fourth quarter.

Sure I think obviously the first full quarter here come combination allows us to have a clear view of what the current base is we do expect in the third quarter to begin.

Seeing benefits from the post integration efforts, but clearly that would be only one month of benefit.

Those will be offset somewhat by a normal growth in the business and in particular investment in the fee revenue strategies that we anticipate over the longer term.

And then that would it.

Compound in the fourth quarter with a full quarter savings post combination and post the conversion, but again offset by continued investment in the business lines.

Okay. That's helpful. And then maybe just just one last one.

I saw there was the.

They are the credit 20 million dollar or so credit that moved to non performer.

This quarter could you maybe speak a little bit about.

Maybe if there was what type of industry that was or any commentary you could give on that credit.

And maybe.

Its relationship to the bank and any any help that we just on kind of describing the credit that you could.

You can provide.

Sure Austin, it's it's Roger So, it's Oh locally based C. and I credit it's broadly in the healthcare space I would generally describe it as a group of outpatient specialty hospitals.

Got it.

Okay great.

I appreciate the questions guys.

Thank you Austin.

Thank you and our next question comes from the line of Michael Perito of KBW. Your line is open.

Hey, good afternoon, gentlemen, thanks for taking my questions Michael.

I want to maybe just follow up on that last question.

You know obviously, the two credit migrate in the quarter, but you you provided the updated credit cost guidance for the year and.

Seem fair to assume that you don't expect any real loss content to materialize from I was wonder if you could just provide some more specifics as to why.

That's the case, whether it's it's it's well collateralized or secure order or just any other details there would be helpful.

Yes, so it's it's Roger again, as we went through our normal impairment analysis, which evaluates obviously collaborative collateral and we feel that we have it appropriately reserved for where the situation stands at this point.

Got it okay helpful. Thank you.

I also wanted to circle back towards.

The question really just a broader question Dominic you made a couple of comments about kind of aligning beneficial.

With legacy WSFS on the fee and deposit pricing side I was wondering if you could maybe provide a little bit more specifics there.

And I guess.

Did that his comment in the deck I I didnt exactly follow about.

The fee income coming in in the updated outlook slide that you guys put on your supplement and she just front a little bit more specifics about what the drivers on both the fee in deposit pricing side are that are kind of aligning I guess beneficial and legacy WSFS.

Sure. Good question. So I would say, there's really two major impacts on combining the products across our customer base and beneficial customers.

The first is on the deposit pricing as we look across our entire footprint there will be a consolidation of products that result in some migration upwards and downwards on their deposit pricing in the near term there will be some products that are kind of grandfathered, but no longer offered and there would be associated promotional offerings to support through the transition.

On the fee income side as we align the products, primarily we evaluated the posting order on our overdrafts and aligning those products will result in kind of a onetime step down.

On some of the product or the fees generated from those products.

Got it put I mean is it fair to say I mean based on your commentary I mean do you guys did I think in the second quarter here.

If we back out some of those gains would like $41 million of core noninterest income, but you still expect that based on your 25% to 27% of revenue comment to grow in the back half of the year off of that figure correct.

We do yes, okay.

I was also wondering you know I noticed the 150 basis point, our away comment in the earning supplement that you maintain that greater than that for the year, but I was curious in <unk> I know, it's kind of a big ask but just you guys provided further kind of profitability clarity after that you announced the deal, but obviously the rate environment has changed dramatically and I was wondering if you were willing to find any updated thoughts about kind of where that 150 can move.

In the future you know with with what we know now based on the rate environment and what you know now also on the cost savings and everything else in front of you that you didn't necessarily have when you announced the deal over almost a year ago.

So this is Roger Michael I presume, you're referring to the 160 that we had referred to for 2020 going forever. Yes, yes. So obviously, we've gone through our normal mid year updating of our plan with starting to have a look into 2020. We think that is still obviously, we're a ways away from it we think that is still achievable.

Considering everything that we've learned since then but obviously its contingent upon us on executing particularly on the revenue side and I would highlight as you know we started out with a little bit smaller balance sheet than we had originally thought but.

We have a line of sight into that and obviously, we'll be spending a lot more time to that very shortly here as we work to develop our 2020 plan.

Helpful. Roger. Thank you then just one last one and I'll step back, but just you know I start to notice in the area of some some increased marketing around the transaction I was just curious or just some general comments about what the reception has been thus far.

And how has it met relative to your expectations and as we approach. The conversion do you feel good about kind of the brand marketing and cost that you put in and trying to create awareness around with the with because brand in Philadelphia.

Yes, thanks for noticing that and I would say the reception in the market has been extremely positive and I think this is a really at this point exceeded our expectations in terms of the buzz in the marketplace and I would highlight that were really kinda only half way through that that brand campaign. It will kick into high gear in the next few weeks, leading up to the conversion with some television advertisements and some increased radio and print and that will go straight through conversion and well into the third quarter. So so far we're very very pleased with that brand campaign.

Perfect. Thank you guys for taking all my questions I appreciate it.

Thanks.

Thank you and our next question comes from the line of Russell Gunther of da Davidson. Your line is open.

Hey, good afternoon, guys, Hey, Russell.

I wanted to get a sense, if you could share with us what your expectations are around the pace of.

Runoff in those identified portfolios is this.

Steady type of Cliff, we could expect is there an appetite perhaps for a bulk loan sale.

Just like to get your thoughts on that as I said.

Sure Russell Dominic how you doing.

Good.

So on the run off portfolio clearly these are non strategic loans that we no longer originate.

Much of which is derived from the held for investment.

Residential mortgage portfolio that we had originally modeled.

At the time in a rising rate environment.

To run off commensurately with the average life of those loans.

Clearly with Arafat decreasing rate environment, what we're seeing is an acceleration of pay offs due to refinancing and we see that in our re Fi business ourselves that you know.

Year over year, our re Fi originations on on our fee based businesses up a 100% so consistent with the rate environment. We would expect this the run off pace in the second quarter to continue for that portfolio.

For the foreseeable future.

Okay, Great I appreciate that yes, so I would add to that obviously, we consider all our options I'd say at this point, particularly for that residential mortgage book.

We don't see the need to do that I would just highlight again that these mortgages. Although there were primarily broker originated are all within our footprint and we think these are great opportunities to engage with these customers and potentially get fuller relationships. So we have a plan in place that we are actively connecting with those customers I want to see how that progress is before we would make any decisions to do anything differently.

All right thanks for that Roger.

Just wanted to get your sense as to what's driving the expectation for flat core loan growth in the back half of the year you guys said.

Really strong cnine growth I think you'd expect that to continue a bit as it just continued paydowns or maybe just share a little bit about what's what's handicapping the core commercial in the back half.

Yes, So Russell Steve Clark here agree the first the second quarter, the first full quarter with beneficial to CNS activity was very encouraging and our pipeline right. Now is strong we have about a $150 million.

Pipeline 90 day weighted average and in addition to that we have about $200 million of commitments that will be closed in the first half of the year that have not funded so we do expect fun things over the next six to 12 months under those previously previously closed commitments.

But on the commercial side Theres pretty heavy refinance activity.

And there's three kind of portfolios that we view as non core and these are participations purchased in.

In multifamily in broadly syndicated deals and leverage loans. These are all part of the legacy beneficial.

Portfolio. So we will allow those to run off and we will exit when appropriate so that headwind on the commercial side. What I. Just described kind of brings as soon we think around flat for the year.

Okay, well, that's very helpful color I guess last question for me would be if you could size up what that.

The aggregate portfolio just mentioned on the commercial side the legacy beneficial lives.

The multifamily syndicated leverage loans.

Just to get a sense for what that headwind could look like.

It is approximately $350 million.

In.

Participation purchased multifamily and of the broadly syndicated leverage loan transaction.

Okay. That's great. Thanks for taking my questions guys. Appreciate the help.

That's helpful.

Thank you and ladies and gentlemen, as a reminder, if you do have a question at this time. Please press Star then the number one key on your Touchtone telephone.

Our next question comes from the line of Brody Preston of Piper Jaffray. Your line is open.

Good afternoon, everyone. How are you Ok Brody.

Hey, just a quick question on the Accretable yield wanted to know what the all in contribution from Accretable yield was both from beneficial and from past deals.

Sure Yeah in this.

Second quarter, given the larger balance sheet now it's about three basis points. So.

You know, it's not meaningful but absolutely contributes to the net interest margin, but as.

As we've expected over the last few years since our previous purchases that will continue to run off towards zero.

Okay. So the so I guess for this quarter the all in the all in accretion number was so it was closer to 62 basis points and then the the legacy I guess accretion will sort of whittle down to zero here over the next 18 24 months somewhere in there.

Correct.

Okay, Okay great.

And then with regard to the CR repaid Prepays that you highlighted in the in the press release I'm just wanted to get a sense for what the blended yield was on.

On that on the on the.

The stuff that Refied away.

So this is pretty Steve Clark again, so I don't have the specific on that portfolio of the C or re portfolio.

But it's kind of a blended yield on pay off for the entire commercial portfolio was about 568.

Okay, Okay and so.

I guess, that's what that's.

I guess relatively in line with what your loan yield was.

It was last quarter.

Correct. So I guess when I think about the pace of prepaid is moving forward I know you highlighted the $350 million from that non core commercial book I guess, what are you guys thinking about in terms of the pace of Paydowns from this book moving forward.

So we believe it will occur over the next three years, we don't expect it all to occur this year at all we think as as rates reset in our notes the market is pricing much more aggressively and we will see these loans refinance out.

Okay.

Okay, and then could you could you give me a reminder, as to what percent of the total loan portfolio is tied to LIBOR and what percent is tied to prime.

Sure I would say about 50% of it is.

Variable.

And of that 60% as lie before and 40% is prime.

Okay, great. Thank you very much for that.

And then I guess, just turning to the Securities book Real quick.

You know I know you.

Sort of re levering some of that portfolio from the optimization strategy just wanted to get a sense for how much you have left if any in terms of.

Additional I guess outside of security purchases.

At this point.

And I apologize I missed the first part of the question, Yes, I can jump in but we've we've completed the balance sheet optimization. So we don't see any significant re leveraging of the securities portfolio. Yes. At this point in time at the end of June we completed the rebalancing of the of the balance sheet and hit our internal targets of mix for investment Securities.

Okay, Great and then for expenses for the quarter.

Do you have the number for what the full impact to the to the full quarter was from beneficial to Twoq expenses.

We do not have that explicitly.

Okay, I guess I'm just trying to the the expense number was pretty good this quarter and so I wanted to maybe get a sense for if you've you've sort of extract in some of the cost savings already.

So this is Roger again I'll jump in we will get you Brody this specific number but I would tell you that as we said previously the modeling and this is holding true for the cost savings is 50%. This year most of that will kick in in the third quarter with the with the brand and it systems integration because that's when we will be.

Closing 20 of the locations as Dominic said, realizing those cost saves and then also the.

The FTD and pack kicks in during the third quarter as well, that's really where most of the savings come but we will put when we'll get you some information with some of the specifics for this quarter.

Okay, great. Thank you for that Roger and then I guess I just wanted to quickly turn to to the provision was there a specific reserve attached to either of the two credits charged off this quarter.

So there were.

Reserves on both of those credits that were then charged off for this quarter correct.

Okay do you.

Do you happen to have the number.

That we don't provide specific numbers on specific credits, obviously for customer and other confidentiality reasons.

Okay. Okay.

And then.

I guess.

For.

I guess I, just thinking about your specific reserves in relation to the $20.2 million C. and I credit this quarter.

I guess could you give us a sense for I guess the trajectory of this of CNR specific reserves that we might see in the 10-Q.

So I would say again I can't I don't have that specific number off the top of my head, but we went through our normal impairment allowance I don't think you're going to see a material change in the level of reserves for our broad CNR portfolio.

But we will get you that number also greatly.

Okay. Thank you and then quickly last two from me on on taking up time, but with regard to cash connect you guys have done a pretty good job managing the the cash and non owned non owned ATM is down just wanted to get a sense for if there is a minimum level that you sort of identified that you need to run the business at its current size of the.

The 28, 980, OMS and smart safes.

Sure. This is Dominic I would say, we see it more as a portfolio mix that we're targeting and.

We're looking for one third on balance sheet, two thirds off balance sheet.

For the bailment business.

In addition, though as we look towards growing the smart safe business that will primarily be funded on balance sheet, but then to balance that as we look to offer our.

Other fee based services for ATM is that we're not providing bailment.

That will balance that mix so.

Those are the targets. We're looking for you clearly see some progress made over the last quarter and last year, both driving bottom line growth and significant ROI improvement.

Okay, Great and then on the cash manage that seemed to have a pretty good jump over the linked quarter just wanted to get a sense for what drove that if that was.

May be signing on one or two large customers or just you had pretty decent widespread adoption of smart safety smart sales this quarter.

Wasn't that or was there anything seasonally driving it. Thank you.

Yes, sure and that's in that third group that I was speaking about where we are providing reconciling and cash logistic services to customers, where we're not providing the bailment, but we are managing the program. So you'll see that number.

Hopefully continue to grow but there was clearly a step up as we as we've made some progress and offering those products and services to non bailment customers.

Okay, great. Thank you very much for taking all my questions coupon. Thank you Bert.

Thank you and our next question is from the line of Frank Schiraldi of Sandler O'neill. Your line is open.

Good afternoon.

Hi.

Just a couple of questions left so just on the.

Steve efficiency target.

For the year efficiency ratio.

Bringing that down from.

58% guide to 57%.

Does that reflect an improvement on where you expect to end up down the road or is that just reflect.

Pulling out some expenses.

Earlier.

Than you had anticipated.

Sure I would say its.

It doesn't necessarily changed our ultimate expectations with regard to the post beneficial opportunities. It's primarily in year just honing in on on the performance. This is Dylan.

Being delivered by the higher yields that we've seen in the portfolio offset by lower and I should say the lower deposit betas.

And then some accelerating cost savings in the first half of the year.

Before we hit the conversion weekend.

Okay.

And then just as far as the margin goes I mean kind of feel like there's some moving parts there were a lot of moving parts, but.

If I think about the back half of the year and where are you guys have guided to I assume there's some.

Level.

Rate cut that's already kind of.

In the NIM this quarter, just given sort of the front running we've seen from why bore.

I'm just kind of wondering if you could break it down in terms of your thoughts on what a what a given 25 basis point rate cut kind of does to the NIM all else equal and.

If that slows over you know the second into the third as maybe I don't know you have floors or you know him on the deposit side, you can move deposit pricing lower more.

On the second 25 Bips.

Or third 25 bit move just trying to get a sense as we look into 2020 as well.

Of where we can see them move.

Sure. Thanks, Frank This is Tom I guess first thing I'll say is when you look at our interest rate sensitivity analysis at the end of the Sir second quarter, it's pretty consistent where we were at the end of the first quarter post combination with beneficial and with that our our asset sensitivity has declined to more neutral so positions us well for their rate environment. We're in for every 25 basis point change on a full year basis. Our net interest income would compressor expand by a half a percent or 2.3 million on a full year basis that would be linear up to 50 basis points or 75, or 100 basis point increase given where rates are today floors wasn't necessarily kick in until really.

First 100 basis point decrease.

Got you Okay. Great. That's helpful. And then just finally, you might have touched on it already but.

Obviously, you had a pretty successful mixed shift in the quarter and two pieces to that one was the significant paydowns you saw but just on the.

Seeing high growth.

Is that sort of a you know that high single digit level is that sort of thought of as sustainable here as we look into at least what the pipeline looks like a in Threeq you.

Frank This is Steve again, I would say, that's probably aggressive I would say really on the CNL I side, we'd be very pleased with kind of low to mid.

We think 9% for the quarter annualized was was a was a little bit of an outlier.

Okay.

Alright, thanks, guys.

That's right.

Thank you.

And with no further questions in queue I'd like to turn the conference back over to Mr. Rodger Levenson for closing remarks.

Thank you and thanks, everybody for participating on the call today are Dominic and I look forward to seeing many of you. When we go back on the road in September .

But as always we're always available to address any other questions you have prior to that.

Thanks, everybody again and have a good day.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program you may now disconnect everyone have a great day.