Nat Otis - Director, IR Matt Morris - CEO Allen Berryman - CFO

Steve Stelmach - FBR Ryan Byrnes - Janney Capital

Good morning. Thank you for joining us for our third quarter 2014 earnings conference call.

We will be discussing third quarter 2014 results that were released earlier this morning. Joining me today are CEO, Matt Morris and CFO, Allen Berryman.

Matt will begin with some brief remarks followed by a review of the quarter by Allen. We will then open up the call for questions.

I will remind participants that this conference call may contain forward-looking statements that involve a number of risks and uncertainties because such statements are based on expectation of future financial operating results and are not statements of fact actual results may differ materially from those projected. The risks and uncertainties in the forward-looking statements are subject to include but are not limited to risk and other factors detailed on pages 5 and 6 of our press release published this morning and in the statement regarding forward-looking statements information, risk factors and other sections of the company's Form 10-K and other filings with the SEC.

Let me now turn the call over to Matt.

Thanks Nat. I want to thank everyone for joining us today.

We obviously appreciate your interest and welcome the opportunity to provide a bit more color on the quarter. Those of you that have been following our story know that we have been aggressively transforming our environment over the last three years.

We believe the remaining initiatives around our cost management program, share repurchase and acquisitions integration are the main key drivers towards enhancing shareholder value. In terms of title revenue for the quarter the housing market continued the over trend seen in second quarter 2014 during the third quarter with a reasonably consistent flow of refinancing transactions and resale transactions showed a steady modest improvement.

Our direct operations will positively influence by having a full quarter's result of operations from the acquisitions completed in the second quarter as well as progress in several of the new branch offices. As a result direct title revenues increased 13.3% compared to the third quarter of 2013 and increased 11.3% sequentially from the second quarter of 2014 without any acquisition related revenue that increased would have remained positive but in the range shy of 5%.

Independent agency revenue experienced another quarter of decline falling 24% compared to the third quarter of 2013 but increasing sequentially 10% in the second quarter, while slightly higher than the general market decline. The decline stems from a combination of factors including geography, agency revenues that is now recorded direct revenue to reach an acquisition.

The impact of overall [ph] refinancing transactions and the continued agency rationalization. As previously discussed we have been focused on the rationalizing our agencies and increasing our remittance rate to assure the highest quality net-worth which we believe we will continue to yield benefits in an increasingly regulated and scrutinized market as well as fostering the overall margin improvement for Stewart.

The title segment overall generated pretax earnings of 74.9 million, an increase of 24% compared to 60.3 million in third quarter 2013. So in a relatively lack luster revenue environment, and in constant with our strategic initiatives around commercial expansion, we continued to see growth in our commercial segment of 31.2% stemming from changes we have made to align our commercial operations and also build off recent ratings upgrades and growing surplus.

The title segment did benefit from a partial recovery of a large policy loss recognized in previous years. Our restructuring strategy for mortgage services including previously mentioned acquisition allowed revenues to grow a 125% compared to third quarter 2013 and 74% sequentially from second quarter 2014.

With the closing of the collateral valuation business update -- business of DataQuick on August 1st, we have finalized the acquisitions announced in the first quarter. The integrations are progressing well and when combined with the stabilization of the Stewart Lender Services business.

The mortgage services segment returned to profitability in the quarter. With the foundation now fully in place in coordination with our strategic plan we’re confident that we have the depth and breadth of service offerings necessary to excel in the increasing regulated market.

These offerings combined with our acknowledge [ph] industry expertise will allow us to further organic growth while expanding mortgage service margins throughout 2015. So to summarize our financial results, total revenues for the third quarter 2014 were 508.1 million a decrease of 28.7 million or 5.4% from 536.8 million for the third quarter 2013.

Operating revenues decreased 5.6% year-over-year to 502.6 million from 532.2 million. Pretax earnings for the third quarter 2014 were 42.8 million representing an increase of 13.2 million when compared to pretax earnings of 29.6 million for the third quarter of 2013.

After spending the last three years stabilizing, aligning and restructuring our organization our remaining initiatives will drive margin improvement throughout 2015 and 2016. The third quarter of 2014 does include 2.3 million of aggregate cost and third party expenses or related to acquisition, integration projects as well as the cost management program.

We also incurred approximately 4.2 million in litigation related expenses on several existing matters. Net earnings attributable to Stewart for the third quarter 2014 was 23.7 million or $0.97 per diluted share as compared to earnings at 15.4 million or $0.63 per diluted share for the third quarter of 2013.

So let me talk in terms of the overall market. Total residential lending volume in third quarter 2014 is estimated to have fallen by more than 30% from the same period of 2013, dropping from 450 billion to 312 billion.

While residential purchase lending is off just 8.9% refinancing lending volume is down by 50.8%. Residential lending was estimated to account for 62.5% of all lending in the third quarter 2014 which is up from 47.5% in the third quarter of 2013.

Existing home sales in the third quarter 2014 are estimated to have fallen 3.8% from third quarter 2013, while increasing 5.2% sequentially from second quarter 2014. September annualized existing home sales of 5.2 million was the highest seen [ph] this year.

September housing starts through a 6.3% from August and newly issued building permits increased 1.5% from August. Home prices continue to rise but the most recent estimate indicating they were up 4.7% from a year ago.

While we’re currently seeing some seasonal decline in order counts, that decline appears muted compared to previous years. The recent decline in interest rates as well as the FHFA announcement on the lieu single mortgage rules has potential to provide upside to the fourth quarter.

So I will now turn it over to Allen for more detail on our financial results.

Thank you Matt. Good morning to everyone.

As a reminder since the management team who oversees the mortgage services operations also overseas our centralized title operations catering to large mortgage lenders, the acquired revenues pertaining to centralized title or reported in the mortgage services segment while the acquired revenues pertaining to local office operations are reported in the title segment. This reporting is in accordance with generally accepted accounting principles and segment reporting rules.

As you would expect the acquired revenues pertaining solely to non-title operations i.e. the (indiscernible) and DataQuick collaterals valuation services were reported in the mortgage services segment.

The remainder of my comments so as otherwise indicated will discuss results reported on the consolidated statements of operations that is the level of which the component of revenues are disclosed. Looking first, there are title operations, total title revenues declined 9.5% from the third quarter 2013 and increased sequentially 10.7% from the second quarter of 2014.

For the title segment revenues increased sequentially 8.5%. With respect to our direct operations, our direct revenues increased 13.3% from the third quarter of 2013, and increased 11.3% sequentially from the second quarter of 2014.

Our direct revenues include the required title operation revenues of DataQuick and LandSafe for the entire quarter. Excluding these revenues the increase in direct revenues from the prior year quarter would have been approximately 3.8%.

Also as a reminder our direct revenues include domestic and international residential and commercial business. The majority of our commercial revenues are generated in United States and Canada.

Commercial revenues from those sources increased a very strong 31.2% from the third quarter of 2013 and increased 20.5% sequentially from second quarter 2014. While quarter-over-quarter results for commercial business can fluctuate considerably due to the timing of win large transactions closed.

Our commercial operation continued to improve it's position in the marketplace. Our improved ratings and the increasing surplus as well as streamlined management and sales structure put in place at the end of 2013 position us well to benefit from the upcoming surge and commercial refinancing transactions over the next several years.

Looking at our domestic business, our closed orders declined 9.7% from the third quarter 2013 but increased 1.8% sequentially from second quarter. As in second quarter our order counts do not yet include those of the acquired operations.

Those orders will be included in the operations that are migrated to our systems. The closing ratio for the third quarter 2014 is 73.6% with the strongest of the year so far, improving from 70.3% in the second quarter 2014 and moving closer to our historical average of 75%.

Our closing ratio for the third quarter of 2013 was 80.7% which was somewhat higher than normal as previously opened refinancing orders, we’re closing but meeting fewer new refinancing orders were been hooked [ph]. However revenue per order close increased 22.9% over the third quarter 2013 due primarily to more commercial and resale orders combined with a decline in refinancing orders and to a lesser degree home price appreciation.

Total opened orders for the quarter declined less than 1% over the prior year quarter and declined 2.8% sequentially from second quarter 2014. As mentioned earlier by late in the second quarter of 2013 refinancing orders had plateaued somewhat and sold a proportion of those orders was generally consistent in both quarterly periods, with those quarter 2014 at 21.3% and third quarter 2013 at 20.8%.

Turning to our agency operations, our independent agency revenue fell 24.6% from the third quarter of 2013 which was similar to the declined seen percentage wise in the second quarter of this year. Independent agency revenues increased 10.1% sequentially from the second quarter of 2014.

On year-to-date basis independent agency revenues have declined 18.6%. Although we don’t specifically know our agents order composition, we have now believe that the proportion of orders from refinancing transactions were higher than previously thought.

Given the industry wide decline in refinancing orders seen in the first half of 2014 compared to the first half of 2013, is it thus [ph] not beyond expected to see a decline in year-to-date independent agency revenues. Our remittance rate at 18.4% was essentially unchanged from third quarter of the prior year, although we continue to pursue agency growth in higher remittance states.

We’re pleased with the performance of our independent agent network consistent with our strategy for this channel, our focus is on increasing profit margins in every state, increasing premium revenue in states where remittance rates were above 20% and maintaining the quality of our agency network which we believe to be the industry's best in order to mitigate client risk and drive consistent future performance. While our market share is important in our agency operations channel, it is not as important as margins were remittance rate and risk mitigation.

Looking now at title office, title office were 9.1 million in the third quarter 2013 or 2% of title revenues. Title losses were favorably influenced by the recovery of a portion of a large loss which was incurred in prior year periods.

Legal requirements associated with this recovery restrict us from providing any further detail. Notwithstanding this recovery our title policy loss experience continued this improvement through the first nine months of 2014.

As we indicated in our second quarter earnings release this favorable development allowed us to lower our core accrual rate effective in third quarter 2014 to approximately 5.3%. We expect to maintain a provision rate in the range of 5% to 5.5% in the fourth quarter and into 2015.

On a year-to-date title losses were approximately 4% of title revenues and 5.3% excluding the recovery as compared to 5.8% in the prior year period. Remember that notwithstanding any adjustment to the core provision rate, quarter-to-quarter fluctuations and the overall title loss ratio are not unusual (indiscernible) large claims incurred as well as adjustments to reserves for existing large claims or ESCROW losses.

Our total balance sheet policy loss reserves were 491.5 million at September 30th, and remained at the high end of our policy range relative to the actuarial midpoint of total estimated policy loss reserves. In accordance with our normal practice our next actuarial review policy loss reserves will be as of December 31.

Now turning to mortgage services, given the significance of the acquisitions to the mortgage services segment both to the current quarter and year-to-date results and our comments will focus on total segment results whereas in mortgage services revenue is reported in the consolidated statement of operations. Revenues from our mortgage services segment were 63.1 million for the third quarter of 2014 increased in 125.3% compared to 28 million in the third quarter of 2013, and increasing 74.4% sequentially from the second quarter 2014.

We closed the acquisition of valuation services business of DataQuick on August 1st and so the current quarter reflects two months of operations for that line of business. Revenues were favorably influenced in the quarter by the acquisitions closed in both the second and third quarter of 2014 as well as by new contracts which began contributing meaningful revenue during the second quarter.

As Matt mentioned our acquisition integration teams continue to work diligently executing the numerous project plans developed prior closing. Significant progress was made and including actions take since quarter end, we have achieved our synergy savings target of $5 million on an annualized basis.

Although we will see some benefit in the fourth quarter and the full benefit will be realized in 2015. We do have opportunities to continue optimizing the acquisitions within the Stewart organization which should yield improving margins in mortgage services for the remainder of 2014 as well as in 2015.

During the quarter we recorded amortization expense on acquired intangible assets of $700,000 plus a catch-up adjustment to amortization expense of approximately $400,000. Amortization related to these acquired intangibles will be approximately $900,000 per quarter going forward.

As a result of our acquisition integration efforts as well as lower overall cost in the legacy mortgage services business, the segment reported pretax earnings of 3.4 million in the third quarter 2014 as compared to a $22,000 pretax loss in the third quarter of 2013 and a pretax loss of 2.1 million in the second quarter of 2014. With the closing of the collateral valuation services business and a possible integration of the acquisitions, we’re well on our way towards achieving the transformation of this segment from it's historical service offerings for the management of default and distressed loans to a more sustainable fleet of service offerings that support the ongoing loan origination and servicing support needs of lenders.

We will however maintain our default services expertise and so this segment why [ph] our products are moving in concert with traditional mortgage origination cycles and products that will provide revenue in down markets. Also although recorded in the corporate segment note that we incurred approximately 2 million of integration cost relating integration activities down from 3.2 million in the second quarter 2014.

With respect to operating expenses, employee cost in the third quarter of 2014 increased 11.8% from the third quarter of 2014 and sequentially 8.7% from the second quarter of 2014. Year-over-year comparisons are influenced by the acquisitions completed during the second and third quarter's as well as by a new second quarter mortgage services contract providing component servicing to mortgage (indiscernible) by military families in which we assume responsibility for the facilities and employees where these services are formed.

Excluding the employees associated with these items, the employee cost would have declined approximately 2.3%. Other operating expenses increased by 31.5% of the third quarter 2014 compared to the third quarter of 2013 and 7.1% sequentially from second quarter 2014.

During the quarter we incurred approximately 4.2 million in litigation related expense on several existing matters. We also incurred approximately 2 million in cost related acquisition and integration activities and the cost management program which are recorded in other operating expenses.

Lastly other operating expenses are also impacted by the acquisitions closed in the second and third quarter's especially LandSafe and DataQuick whose direct production cost recorded in this line item. Going forward the elimination of certain third party service contracts in conjunction with the integration program results in lower run-rate operating cost for the acquisitions.

Depreciation and the amortization expense of 6.6 million in the third quarter was an increase of 2.5 million compared to the third quarter of 2013. The increase is due to additional depreciation expense on fixed assets to the acquisitions, the 1.1 million of amortization expense on acquired intangibles as described above and 700,000 of amortization expense related to an (indiscernible) production system placed in service July 1st, 2014.

During the third quarter of 2014 we continue to make progress on our cost management program. We engage third party subject matter experts to further define the project plans developed during the same quarter and refine to the estimated savings to be achieved from each of the opportunities identified.

These initiatives will enhance our operating structure and will drive long term efficiencies and while most of these initiatives are into the early stages we implemented actions during the quarter that achieve approximately $2 million of run-rate savings. We expect the majority of the individual projects to be completed by year-end 2016 and we remain committed to our state goal of achieving $25 million of annualized cost savings exclusive of market conditions by the end of 2015.

Lastly just a few comments on some other matters. Our effective tax rates were 41.4% and 42.9% for the third quarter of 2014 and 2013 and 39.3% and 42% for the first nine months of 2014 and 2013 respectively.

The third quarter tax expense as the amount computed for the first nine months less the amount previously reported for the first six months. The income tax expense shown for the first nine months is based on a forecasted full year effective tax rate.

The effective tax rate for the first nine months of 2014 decreased relative to the first six months of 2014 when it was forecasted to be 47% primarily because of an improved expectation of full year 2014 income since the end of the second quarter. Cash provided by operations was 47 million in the third quarter of 2014 compared to 27.8 million for the same period than in 2013.

Substantially all of the cost incurred in the acquisition, integration efforts were paid in cash during the quarter. Cash title loss claims payment was 23.3 million in the third quarter of 2014 which excludes the recovery discussed above as the cash for it was [ph] received subsequent to quarter-end and compared to 25.9 million for the same period in 2013 continuing the trend of decline in cash claims payments.

Notes payable at quarter-end totaled 61.4 million down slightly from 65.5 million as of second quarter end. On October 14, the remaining 27.2 million of senior convertible notes converted into approximately 2.1 million shares of common stock pursuant to the terms of the underlying indenture.

On October 21st, we expanded our line of credit from 75 million to a 125 million providing us with additional flexibility and access to cash needed for short term operational purposes in order to take advantage of an attractive acquisition opportunity. Our debt to equity ratio at quarter-end excluding the senior convertible notes was approximately 10%, below the 20% we have said as our unofficial internal limit on the leverage.

We don’t yet have the third quarter statutory balance sheet for our principal underwriter completed, as of the end of the second quarter our statutory liquidity ratio was 0.95 to 1. Our internal objective is to achieve and maintain a ratio of at least 1 to 1 as we believe that ratio is crucial for both the ratings agency and competitive perspectives.

On an ongoing basis, this ratio will largely guide our decisions as to how much cash we will dividend up from the underwriter to the parent company. During the third quarter we acquired 422,323 shares of our common stock for an aggregate purchase price of $13.4 million pursuant to the previously announced stock buyback program.

Year-to-date we have acquired 518,365 shares for an aggregate purchase price of 16.3 million. We will be alert to opportunities to buyback shares at a price -- if it does not materially dilute book value for the shareholders.

We remain committed to our previously announced $70 million stock purchase plan and is to be completed by year-end 2015 which will be accomplished through cash generating by improving operations. I will turn the call back over to the operator to take any questions.

Matt, first just maybe a near term type question, you talked about a little bit of upside potential going into the fourth quarter going where you’re seeing the business will ramp clearly with the rates where they are -- we might get a little bit of refi bounce here. You think you’re sort of adequately right sized that opportunity or do you need to ramp up expense a little bit just sort of capture that or how do you feel?

No I don’t think we need to ramp up expenses at this point. Like I said we usually see seems to be a declining year normal residential and refi business going into the fourth quarter.

So I think again we’re constantly looking at employee expenses relative to revenue coming in and normally at this time maybe looking to reduce those expenses, so you know order accounts you know keep up -- we should have some good opportunities there as well.

Okay. And then maybe on the long term on the commercial side.

It's been a little over while since you guys have gotten that rating back to where you wanted it, when I think about that opportunity, is it now matter of just the commercial market growing for you guys or is it still an issue where you guys have the opportunity to sort of increase your penetration inside that market? In other words are you kind of getting your allocation as we speak or do you think there is a more opportunity to get a bigger piece of the pie.

I think what I would say we have been encouraged by -- seen some progress in that segment, this year and so we’re seeing traction from the ratings upgrades, seeing traction from our strengthening surplus, seeing traction from our change in management that we have done. Hopefully that continues to progress.

We’re not -- I would say all the way there so we plan to continue to attract share in that segment but timing, it's hard to assess commercial on a quarter-by-quarter basis but we were encouraged by our quarter this year and encouraged by the plans we have made and how we see them progressing in the future.

Okay and then just last one, on title losses obviously recovery aside, how should we expect that trend in 4Q and in the '15 on a more normalized basis?

I think setting aside the recovery that you’re seeing a normalized title loss ratio in third quarter. We continue to trend very well against our actuarial projections and so had no plans at the moment to either raise or lower the accrual rate in the fourth quarter, I just don’t see the reason to.

We complete our year-end actuarial review as part of our year-end close and so as we get those data back then we will have a chance to reassess what we do in 2015. So sort of stay tuned I guess is the answer there.

Just wanted to get your thoughts now with the convertibles converted to common stock, your thoughts on any changes to potential dividend philosophy. Just wanted to get your thoughts there and obviously again with the stock trading above book, wanted to get your thoughts, repurchase versus dividend going forward.

Sure. I think we have said that our initial use of our capital is going to be to complete the stock repurchase program.

We recognize that our dividend is probably is not equivalent to what our industry peer group is and we certainly want to address that but we think in the near term the focus is going to be on completing that stock repurchase program.

And then also just quickly wanted to talk a little bit further I guess -- the declines in the agency channel. I guess part of that you noted was because there may have been more refi in that channel that you had previously thought.

But heading into the fourth quarter this year and into next year refi shouldn’t as much of a headwind. So should we expect agency revenue to kind of plateau from here on a year-over-year basis?

Yes I would think so. Again we have talked, several things we have kind of alluded to -- for agency we did have some of the acquisition was previously, agency that we purchased which is now direct.

We did have some geographic differences in addition we have talked about you know continue to kind of rationalize our agency network for this best in class systems. We have talked about having kind of a 50:50 mix of direct versus agency and I think you saw a lot of progress toward that and really our focus is now kind of leveraging that stable platform with growth and growing our agency businesses in higher remittent states.

But we have seen again from a claims perspective, we’re very happy with where our agency segment is right now and we are seeing potential growth from here.

And then just quick one, my last one is with the fee per file growth again it grew very nice, year-over-year and sequentially. I realized the commercial is growing but and refi is shrinking.

But is there something else happening there because again the growth seems to be pretty dramatic there.

Yes it's obviously the growth in the commercial business, it had a bit of an outside effect in the quarter fee per file [ph] but I don’t see anything abnormal about that. It's kind of what we have seen historically when you get a big shift in mix and particularly when you look at this sort of first nine months versus last nine months you had a really major shift in residential resale versus refi and then you weigh around top of that, a pretty dramatic increase in commercial in Q3.

Home price appreciation obviously played some role, it's obviously not -- home prices aren't accelerating at same rate that we saw a year ago. They are sort of moderating now which is I think as expected.

So that was some influence in the quarter but I would say the main influence is just the shift in mix to more commercial transactions.

And again within commercial transactions, are you guys doing I know you don’t give this data but maybe just directionally, are you guys doing larger commercial fee per file transactions now than in the past?

From a pricing perspective I'm not aware of any dramatic increase in terms of -- core sense per thousand [ph] pricing. We’re seeing larger deals because of increasing surplus particularly in states where you’re limited to some fraction of your surplus whether it's 50% in Texas or 100% somewhere else.

You know when you grow your surplus that has a direct correlation to the size of the deal that you can take on.

This is James filling in for Brett, congrats for the quarter. So first question is kind of mortgage services, can you kind of give some idea what the organic growth rate was in that segment and then also just any color on the profitability in that segment and how it might trend into 2015 as it kind of gets upto that more 10% to 15% range?

If by organic growth you mean sort of how the legacy business performed. I think the legacy business continued to which is the default and distressed revenue stream, that continued to see a decline in the quarter which was not unexpected and so the real emphasis has been over the last nine months of transforming that segment away from dependency on that line of revenue and more towards the diversified line of revenue which we think with the acquisition as we have largely achieved that.

Going forward into 2015 obviously not providing guidance but I think some of the statements we have said earlier in terms of revenue expectation for the acquisitions are still valid. Now that we have completed the acquisitions, the revenues are going to ebb and flow a little more closely aligned with mortgage originations ebbing and flowing.

So I think there is some expectation in '15 that mortgage originations will be flattish to '14 or at least the current thinking as I understand. To iterate we did -- we talked about the immediate synergy savings of 5 million which we feel is -- we would have taken that out on a run-rate basis but we still need to integrate the acquisitions and there is rationalizing and other mortgage services opportunities.

So we have talked about getting into increasing margins moving next year and see great hopes in that, maybe not from the immediate synergies but there is a lot of actions underway to reduce our cost structure and to optimize some of those platforms within the Stewart network.

And then on the commercial business, good results there, was there any lumpiness in terms of big deals that came in or was it more kind of the broad based strength and then do you kind of expect this 30% type of growth to continue even though it's kind of lumpy from quarter-to-quarter.

Well to answer your first question, there was no single sort of large transaction in the quarter that provided a spike. You know to your second question it's 30% of the big number, right?

So I don’t know that I would expect that kind of increase on a year-over-year basis in any particular quarter although it could certainly happen in a particular quarter recognizing that closing of these commercial transactions maybe anticipated in one quarter but not unusual to see them slip into a subsequent quarter. We didn’t really have that much impact in this quarter but it's still something we have seen in the past and I don’t think that is out of the question going forward.

All right and then the last question I’ve is on the agency business and as you guys worked to increase your agency presence in those high remittent states, first of all what's the strategy for doing that? Is it kind of buying out agents or is it signing up new ones?

And then how do you see those remittance rates trending into 2015? Are they going to get to a more of a peer type level or is that sort of more of a longer term objective?

I think we’re definitely -- so recruiting independent agencies so we’re signing up new agencies in those remittance states and we do see that trend moving more to I think where our competitors are. We do want to be cost us where we’re directionally moving in that direction but we want to make sure that the operations are profitable but we will see improving remittance rates going forward.

Great. Thank you Leo.

Again, just wanted to thank everyone for joining us. It has been a very active year, we realized as we have transitioned mortgage services we have enhanced our commercial business.

We have moved toward the 50:50 mix of agency versus direct premiums in-line with our strategies. Just on a final note, we remain mindful of industry conditions and some observers obviously predicting a sub-trillion dollar mortgage origination market in 2014 with little improvement in 2015.

2015 is also a year in which we and the industry will observe changes stemming from the CFPB Enforcement of Dodd-Frank Mortgage Regulation. So given these market conditions, we believe continuing to execute on the remaining elements of our five year plan including the cost management initiative, integration of mortgage services acquisitions and the stock buyback, are they optimal strategies to drive shareholder value.

These plans are focused on continued margin improvement throughout 2015 and look to 2016 where we expect to see a full run-rate benefit. Successful execution of our plan will ensure the offering of financial stability our customers expect and the financial reward our shareholders expect.

Thank you very much for your time.