Euronet Worldwide, Inc. (EEFT) Earnings Call Transcript & Summary

Greetings, and welcome to the Euronet Worldwide conference call. [Operator Instructions] Please be advised that today's conference may be recorded. It is now my pleasure to introduce your host, Mr. Scott Claassen, General Counsel for Euronet Worldwide. Thank you. Mr. Claassen, you may begin.

Thank you. Good afternoon, and welcome, everyone, to Euronet conference call. Today, we will discuss the acquisition of the Piraeus Bank merchant acquiring business on this call. We have Mike Brown, our Chairman and CEO; Rick Weller, our CFO; and Nikos Fountas, the CEO of our EFT division on the call. Before we begin, I need to call your attention to the forward-looking statements disclaimer on the first page of the PowerPoint presentation we'll be making today. Statements made on this call that concern Euronet or its management's intentions, expectations or predictions of future performance are forward-looking statements. Euronet's actual results may vary materially from those anticipated in such forward-looking statements as a result of a number of factors that are listed on the first page of our presentation. Euronet does not intend to update those forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances. Now I'll turn the call over to our CEO, Mike Brown. Mike?

Thank you, Scott, and I will begin my comments on Slide #4. Good afternoon, everybody. I am frequently asked about acquisitions on our investor call. Today, I get to tell you about one that we're really excited about, and it comes from a familiar and trusted business partner in Piraeus Bank in Greece. As you might know, Euronet has a long and successful history in Greece, and Piraeus Bank has been a major part of that success. In fact, we have served as payment processor for the bank since the early 2000. Through this close relationship, we became aware of the availability of the Piraeus Bank Merchant Acquiring platform, or what I will refer to as PBMA in this call, and its associated assets. We were evaluated among other bidders and eventually awarded the opportunity to purchase the business. We are now at a point where we can discuss the details publicly. As you can see on this slide, this transaction includes the PBMA POS fleet of about 205,000 terminals for card-present acquiring, which represent approximately 20% of the total acquiring market in the country of Greece. Additionally, this transaction includes their online transactions, which represent approximately 40% of the online acquiring market in Greece. PBMA employees with expert knowledge of the business segment and a diverse customer base of about 170,000 merchants from across all business sizes and industries are also included in this deal. We expect to close the deal in 2021. Next slide, please. On Slide 5, you can learn more about the bank. Piraeus is the largest bank in Greece based upon customer deposits with 5.5 million customers or 65% of the bankable customers in Greece. As I mentioned on the previous slide, the bank has about 205,000 POS terminals that are part of this deal. For your information, the bank also has 500 branches and 2,000 ATMs across Greece. I should state for clarity that the Piraeus ATMs are not part of this deal. PBMA is a market leader in Greece. As I mentioned, it is well established with customers who have card-present or online transactions where a card is not present. It also offers omnichannel options, where about 10% of the PBMA merchants use both a physical POS terminal for card transactions in their business, and an online transaction option through their website or app. Let's move to Slide #6, and we will give you some behind-the-scenes kind of reasons for this acquisition. While merchant acquiring has not historically been a large part of our business here at Euronet, the situation in Greece provided an attractive opportunity for us to expand into this important component of payments. Historically, the Greek local economy has maintained a significant dependency on cash. But as most of you know, consumers continue to be attracted to the ease and convenience of digital payments. And further to that, in recent years, the Greek government established programs and issued mandates to grow noncash transactions, in part because they seek to collect more taxes. As a result, the merchant acquiring solutions are in demand throughout Greece and the adoption curve is certainly trending upward. So with these things in mind, we believe this is a good market to invest in acquiring. We have a slide later in the presentation that discusses the details of merchant acquiring in Greece, so I will elaborate a bit more on this subject in just a few minutes. Aside from the acquiring opportunity, we believe there are significant growth opportunities relating to our REN and REV payments technology, and the capabilities of our epay money transfer and EFT business segment products. Our ability to process alternative payments such as QR codes and the other digital payment instruments included in digital wallet can immediately expand the offerings that PBMA has for its customers. Beyond that, we envision a 2-way street of sorts, where we could offer merchants our products such as cross-border money transfers or digital content downloads. Further, we could also offer the acquiring capabilities of PBMA to existing merchant relationships that we have with REV and epay. We are also optimistic that the PBMA acquisition in Greece will lead to greater opportunities for REN and REV with other banks and fintechs in that country as well as the surrounding region. Next slide, please. I'm on Slide #7 now. So in addition to the factors I've discussed, it's worth emphasizing the deal became even more attractive because of our existing partnership with Piraeus and our history of success in Greece. This familiarity with the ease and technical -- this familiarity will give us ease in the technical migration of the PBMA platform to Euronet. We were also encouraged to pursue this opportunity knowing that we are acquiring their employees who know the PBMA system. We structured the deal so the bank will continue to exclusively promote future products and services we develop through their customer service center, marketing programs and branch network. Next slide, please. Starting with Slide #8, I'll provide 3 slides that expand on the value proposition of this agreement. A few slides ago, I discussed the government's involvement in promoting the rapid adoption of noncash payments throughout the country. Here are more details of the history of that decision. As you can see, it is a relatively new movement starting in 2015 that is building with each passing year. The COVID pandemic also played a significant role in the acceleration of card-present and card-not-present transactions. Slide #9, please. It expands on the recent growth of the acquiring market in Greece. As you can see in the top row, there are significant year-over-year transaction increases. On the bottom graph, you can see where Greece, which is the yellow bar, ranks against their peers in Europe, who all enjoy a significant head start in their adoption of noncash payments. This suggests to us that the card acquiring market in Greece still has a significant market opportunity to grow. So let's go on to the next slide. On Slide #10, this analysis demonstrates how card payment penetration is really in the early stages in Greece, with the potential for some of the highest growth outlooks for card payment volumes in Europe occurring from now through 2024. On Slide #11, you can see some of the 170,000-or-so merchants who use the PBMA platform by industry as well as their logo. The bank also consistently ranks high in customer satisfaction and retention ranking, speaking to the success of the platform today. Next slide, please. I'm on Slide #12 now. This slide speaks to the growth leverage we see with this opportunity. As you can see, Greece, in relation to other European countries, has one of the lowest card penetration rates and the highest growth potential. You couple that with the products available for our epay, EFT and money transfer businesses, and we should see great success ahead. Let's flip to the next slide, and I'll point out how we see that success materialize. Here on Slide #13, you can see we're not just another acquirer that's adding some more volume. We bring a unique blend of technologies and services in our arsenal that will take the PBMA network well beyond mere acquiring. I want to emphasize this is not a future road map of capabilities on this slide. These are real solutions that we deliver today to various markets. Leveraging the stability and innovative features of our REN foundation and the reach and the flexibility of the REV payments cloud portion of our global payments technology, we should be able to implement these features in short order once the deal is completed. Next and last slide, please. Here on the last slide, Slide #14, you can see the points that I covered. We are diligently working with Piraeus to close this deal by the end of the year. The PBMA business is expected to complement Euronet's history of double-digit growth and contribute approximately $80 million to $90 million in additional revenue and $15 million to $20 million in additional EBITDA in the first full year of operations. Moreover, Euronet expects to add approximately $3 million to $5 million in incremental operating costs prior to the acquisition close to enable an effective transition from Piraeus to Euronet. With that, we will take your questions. Operator, would you please open the line?

[Operator Instructions] Our first question comes from the line of Andrew Schmidt with Citi.

Congrats on the acquisition. So historically, you guys have done a good job of acquiring assets like this and then applying other sort of, let's call it, your special sauce in order to kind of really accelerate the growth. In this case, it seems like there's a lot of good underlying growth, but there's also some things you can do, whether it's -- you mentioned EFT, epay, RIA or more capabilities in REV and REN. I guess in terms of just incremental growth in revenue synergies, how would you rank the opportunities across what you've outlined here?

Well, I think the kind of -- well, first of all, you start out with 205,000 POS terminals and a great online presence. I mean the first and the easiest products to add to this are, of course, our epay product because we do that in a number of markets. We even do a little bit of it in Greece right now. But we can certainly do that. So that's kind of a no-brainer, where you offer those merchants the ability to sell some of our epay content, whether this is brands, whether this is a Google Pay or Google Play or any of those other kinds of Netflix or whatever. We have to get the brands to agree, but that's kind of a no-brainer, plus prepaid mobile top-ups and so forth. And then the next thing is let's not forget that we have tens of thousands of small merchants that are channel for -- that are actually are agents in Ria. And each of those agents are small shops. They can be ethnic grocery stores or just other small kinds of bodega kind of places. And each of those probably have a POS terminal right now. Why can't we have a combination deal for them where we can give them both Ria and also acquiring? And the nice thing about that, too, is this also is a bit of an edge on your credit risk with the retailer because you've got money coming in one way and going out the other way, and you can kind of net settle those things. And then it's just -- kind of just more of the same. This is the kind of stuff that we would like to do. We'd like to also take this and expand these operations outside of Greece. The region, particularly that whole Baltic region, is kind of light. It's very much like Greece with respect to the penetration of POS terminals and certainly online. And we could take the same platform into these other markets, where we currently have operations either with epay or with EFT or with both.

And Andrew, I'd just add to that, that when you ask what's the likelihood of success and the momentum here is that if you think about this business as, first, having a customer and second, a way to be able to deliver it. And as Mike said, it's 205,000 terminals. It's 170,000 merchant relationships that can all profit and benefit for the distribution of our product, whether it's epay product or money transfer product or it's even doing things like installing an ATM in their shop to encourage more customers to come in. And the other nice thing is we've got the technical platform to deliver this. We can put the transactions on a stand-alone terminal or we can integrate it into their electronic point-of-sale terminals that we've done for 20 years now. So this is a great opportunity to bring together really 2 very important things for success: customers and products. So -- and then behind that, as Mike said, we've got a great team in Greece that's been there. It's not like we're starting in a new market. We've got some of the best leadership, the best people that understand that market and so we feel really good about our ability to get something more than just one and one here.

Yes. I mean our goal with any acquisition is a kind of a 1 plus 1 equals 3 deal. And I think we've got that here.

Yes. That's great context. I appreciate the enthusiasm. And then just on the financial characteristics, I think you mentioned complementary to double-digit growth. Is that -- kind of 2 questions. Is that double-digit growth comment kind of the run rate of the business now before you apply all these opportunities that you mentioned? And then second question, the financial characteristics that you outlined. Is that -- I think you mentioned that you anticipate closing in 2021. So is it fair to interpret those contributions as like a 2022 expectation?

Yes. I think so. In terms of the growth rates, what Greece saw is as you went through the pandemic, much like many other places, the percentage of electronic transactions increased as a relationship of total purchases because of these lockdowns or people's interest to do touchless type of transactions. And in '20, that business grew volumes in upper single-digit ranges. But keep in mind that those were a bit suppressed because Greece, which is a market that has some dependency of travel on it, and the pandemic had things locked down. As we go into '21, those numbers are moving into the lower double-digit ranges, and we expect that they will continue to accelerate as the travel markets pick up more momentum. And as more customers use digital transactions, and as Mike said, some of the government mandates or steerings to push people to that. So we see it going into '21 with a lower double-digit rate. And we're excited to get our hands on it as quick as we can because we think that we're a growth-oriented business. Our people live and breathe growth every day. And I think in every acquisition we've done, we've been able to bring that same level of momentum and tempo into the business. So we're looking quite forward to getting these other products in there and establishing some nice double-digit growth rates. But we've got to go in and we got to do our work. We've got to get it closed, and we've got to take our enthusiasm into that market.

And to some extent, it'll take -- we don't know for sure, but probably into the late third or fourth quarter to close this thing. So that will give us time to get all this stuff kind of all teed up and organized. And let's not forget, in 2019, Greece had 26 million tourists. They were pretty much absent last year. So as we go into 2022, we'll have this as our asset, and we'll have, hopefully, the tourists back.

Our next question comes from Peter Heckmann with D.A. Davidson.

Nice deal. Could you talk a little bit about the related payment volume here just based on the transaction volume that I'm seeing for this unit? It looks like it accounted for maybe a quarter of payment volume in Greece, so maybe $6 billion to $7 billion. Is that in the right ballpark in terms of card payment volume? And then can you talk about just -- I know you've been in -- you've done a number of different types of card solutions over time, issuing POS outsourcing, et cetera. But your overall merchant acquiring operations, I think, are quite small. But in terms of what maybe percentage of revenue the other merchant acquiring or card operations might represent so we can think about that as a total once you've closed this deal.

Yes, Pete. I think if you add a $2 billion to the range that you threw out there of $6 billion to $7 billion, I think you'd be a little bit closer to the ballpark. We're seeing more like $8 billion to $9 billion that's expected this year in volume. And then kind of a ballpark number is the other acquiring business that we have that cuts across 14 markets in Europe. So it's not an insignificant business, is kind of in the 80% range of what this business is today. So it'll be a little bit more than doubling what we have out there. You add it all together, and it would represent kind of in the ballpark of 5% of our consolidated revenues.

Got it. All right. That's really helpful. And then just in terms of the high incremental margins related to payment. I know you're going to try and expand into additional countries. But is this something that you think could trend into the high 20s in terms of EBITDA margin over the next 5 years?

Yes. Well, as you know, there's always a lot of uncertainties or unknowns as to what happens there. But I would say the nature of the business. Fundamentally, acquiring businesses can operate in the 25% to 30% margin ranges. We're not there at this point here. Part of that is because of, I would tell you, some added costs we put in there to be able to get the business in the shape that we would want it. But it's a volume-based game. And we see more product coming in. And when you bring in these extra products, whether it's money transfer or epay or whatever, those are just going to be nicely accretive or enhancing to the margin number. And last thing, you would anticipate that there would be some rationality of price competition. So absent something coming off on the rails on pricing competition, we would expect that we can improve this business over, let's call that, 5-year horizon into the 20% to -- 25% to 30% range without having a particular stake at one end or the other of that. But that is certainly possible.

Our next question comes from Andrew Jeffrey with Truist Securities.

Mike, I think I missed your comment on omni. Did you say 20 merchants -- 20% of the merchants are using some form of omni solution?

I think 10% of their merchants, not 20% because they've got a whole bunch of little guys who just have a little shop, and they're not really the -- your target for omnichannel. But the 10% that are, are the bigger chains, the ones that you saw in those logos that we put on the second or the third to the last slide.

Yes. Because they generate slightly more than that in terms of the complement of the total revenue. So a little bit stronger mix from bigger customers there.

Okay. And which is notable, I think, to me, from -- or the cross-sell of new products and technologies is interesting, but I'm looking at a business today that generates about 100 basis points of net revenue yield despite exposure to some big merchants, and then there's this long tail of omni. Can you talk about -- I assume Greece is really early. I think Europe generally is early in terms of omni. But is that really low-hanging fruit just pandemic or otherwise? It just feels like we've got this big...

Sure. I mean you've seen it in every market. I mean not just pandemic that accelerated it, but more and more commerce is happening online and you having a good -- and having 40% of that market there in local language with local payment options and so forth should give us a real leg up, and then we'll have our additional products to put into that.

And the other thing is that we got some great product that's technology-driven enhancements that we can take to those merchants, products that are focused on safety, products that are focused on alternative payment methods and things like that. So some good opportunity that we also have available to bring there.

Yes. You might remember that we've -- that we're actually an alternative payment acquirer in big markets, very established markets like Germany, et cetera, across Europe because we've got that advanced technology and we do this for big chain merchants. So we'll go -- whoever doesn't have that now in Greece, we'll certainly go after that as well. And everybody thinks alternative payments, okay, that means like WeChat Pay and Alipay. Let me just tell you, there are tens of those, maybe 20s and 30s of those, coming in every market now. They're -- alternative payments are growing. Those are 2 big names. PayPal is another name. They don't do too much in the physical, but they certainly do in the online. And -- but you're going to see more and more names like that crop up that might be a little bit -- have more of a local flavor, and we could easily add those into our alternative payment solution.

Okay. That's helpful. And then as far as go to market, is this going to be a combined effort, Piraeus Bank sales and Euronet? Or are you acquiring a sales force along with this, too? And will you be going to market with the Piraeus brand or Euronet?

Hey, Nikos. You're on and you're right there in market. Do you want to answer that question?

Yes. We're going to have a hybrid model going to the market. We're going to Piraeus, and that work is -- we're going to be exclusive, but we're going to have our own direct sales force and other means of going to the market. Now in terms of brand, we still haven't decided if it's going to be Euronet or combined Piraeus branded, but we have in front of us a few months to decide what is best interest for both parties and merchants.

And I might add that Piraeus Bank has financial incentives to be good partners with us. So it's kind of like a win-win. And let's not forget that if somebody loses their acquiring, right now, Piraeus Bank might bank them and Piraeus as a bank wouldn't want their merchants to go to an alternative bank. So keeping a good relationship on acquiring makes all the sense in the world.

Yes. And this was -- an important part of the transaction was the mutual benefit out of this. Piraeus gets an opportunity to present to their customers the best acquiring that will be in that market, the best technology out there, the best customer experiences. They know that from today because, as Mike said in his presentation, is we've been doing the processing for Piraeus for 15 years. So they know that we're the best in the market. And so the -- our interest was quite high on having Piraeus be the -- one of the frontline advocates for acquiring with the customers that come through their door. So this is an important part of really a great collaborative, strategic partnership with the bank.

And I would like also to add, Rick, on that, that the offerings to the merchant is a combined offering because the banks will continue to provide all its services like loans, deposit, prefinancing to the merchants while we complement with epay or Ria, but also other EFT products that we are providing in other markets like DCC, tax refund, loyalty solutions and so on and so on.

Our next question comes from Mayank Tandon with Needham.

This is actually Kyle Peterson on for Mayank. I just wanted to touch a little bit more on the cross-sell opportunity. Does PBMA have a big presence with some of your existing epay and Ria partners now? Or is it more in the big box? Like how should we think about the existing penetration within that, like 20% of the kind of in-person acquiring with...

Yes. So it's interesting. We're quite successful in Greece with POS processing and with our ATM network. We have nascent operations of both Ria and epay in that particular market, and that's kind of what's exciting for us because now we've got kind of a loud speaker and a springboard to push those 2 product lines into that market. And in fact, Kevin might have -- Kevin Caponecchi, who runs epay, might have an additional comment.

Yes. We're increased today with epay. But like Mike said, it's very small. But the small network we have is performing rather well for its size. So the opportunity is, obviously, as Rick and Mike have said, is to put this epay content across this network. Now the entire network may not apply, but a good portion of the network has a good overlap with what we believe would be successful from an epay perspective. So we're optimistic.

Got it. That's super helpful. And then just a follow-up on the existing acquiring business that I know you guys mentioned is in 14 different markets. Is Greece one of those markets? Or like do you guys have any merchant acquiring there? Or what are some key markets that you guys have in the existing legacy -- not legacy, but existing acquiring business?

Nikos, do you want to handle that? You run it.

Yes. Yes. In Greece, we don't -- we didn't acquire directly before this acquisition, but we do have an MSP. We're a network service provider for -- well connected with the big merchants to acquirers and we switch transactions, and we have about 10,000 terminals in big corporates, mainly the biggest brands. And there is a small overlap with the merchants that we're buying there so there's an opportunity. Across Europe, we have -- we have some few -- 40,000 around -- approximately 40,000 merchants in Germany. And from then on, we do selective acquiring in the big Western European countries like the U.K., Italy and just France and Spain. And we have some big corporates that we do cross-border acquiring with OMV in fewer stations across 9 countries in Switzerland, Germany, Austria and Central Eastern Europe.

Our next question comes from Tim Willi with Wells Fargo.

Mike or Rick, could you talk a little bit, I guess, about taking these capabilities and, I guess, with open banking and open payments and everything that's going on across Europe? And then, obviously, your REV and REN and your EFT connections, from a broader perspective, does this put you sort of into that discussion over time even on a selected basis about bringing some unique capabilities to maybe a business...

Yes. Tim, you're -- unfortunately, your line is breaking up. We got about half of the words there. Can you try to repeat that, please? We may have completely lost you. Or let's just see if anyone -- operator, are you still on the line?

Yes.

Okay. So we still have folks out there. It must just be that Tim is in a difficult cell coverage area there.

Our next question comes from Darrin Peller with Wolfe Research.

Mike, can you give me some thoughts on your M&A strategy right now? Just a quick update? I mean is this -- a, is this sort of the beginning of maybe more of a proactive effort around merchant acquiring broadly? And is there any other assets out there you're looking at that are similar to this? And then maybe just more broadly, where your head is at right now in terms of M&A?

Okay. So this is -- typically, we're not aggressively looking for merchant acquiring because we don't want to get into that whole commodity scale kind of business. We like this because it's a great platform in its market and it could be by far the dominant player if we can -- if we play our cards right and do the right things, and it allows us to cross-sell into other markets. Probably don't have an appetite for other big acquiring assets at this time. We are looking at assets actually in the other 2 divisions now. We're always looking, but it's just -- as you might have noticed, if you look at 2019 and backwards, we had a 23% bottom line cash EPS CAGR growth over that time. And it was probably 99% organic. So we take -- we love acquisitions when we can do them, but we don't need them to grow. And in fact, this year, all I need is a few tourists and we'll be off to the races. So we're keeping our eyes open, not necessarily chasing a whole bunch of these -- of acquiring businesses unless you could find a little niche player that makes a lot of sense and would add to this.

And typically, the -- our interest in acquisitions is to promote our growth story if not just to add another layer onto the business. It's acquiring something that has fundamental growth to it. And hopefully, what you saw in this presentation is we believe that this market has fundamental growth to it. It's got lots of lift. It's got great cross-sell opportunities with our other products. This is kind of like a hand in glove opportunity for us. So we'd gladly consider other opportunities like that, but just adding volume for the sake of volume and beating up the -- for the last bit on a transaction isn't the way we've operated and been successful.

Our next question comes from Ken Suchoski with Autonomous Research.

I was just wondering if you could tell us what the revenue and EBITDA figures were for this business in 2019 kind of pre-COVID would be helpful.

I'd tell you what. We've not discussed releasing those numbers with other people and so I would just rather not run that out in traffic there. If you kind of just go back to what I mentioned in terms of comments, in terms of what they had seen in terms of relative growth volumes coming through '19, you could kind of backwardly imply that from the numbers that we give you on what we expect the first full year to be.

Got it. I guess just a question. I was expecting maybe the margins to be a little bit higher than the 20%. So is there any impact from COVID flowing through to that? And I guess, is there an opportunity to maybe bring that processing volume onto one of your existing platforms in Europe?

Well, as Mike said, we essentially already run the processing off of our platform today because we've done the processing for Piraeus and so there's not a lot of synergies in that regard. There are some other synergies just as we kind of bring together the pieces of the acquiring we had before. We'll bring this together. There'll be some rationalization. But also kind of in line with acquisitions, we've never made acquisitions to improve the bottom line through synergies. We've made acquisitions to get growth. And I'd say, clearly, the COVID thing has had a damper on some of their transactions, like you've seen across the entire card industry, where people are not moving about as much and stuff like that. And this particular business is all the same thing. So I'm sure if there would have been some more margin, more transactions come through, it would have given more lift, a drop to the bottom and a little bit margin in there. And then also remember, as I said, we've added some extra cost in there to build the business to get it into the kind of platform that we want so that we're in a position to take this in adjacent and other markets, as Mike said. So that's probably why you're seeing that as a little bit lighter margin out there.

And also compared to, say, the U.S. market, let's not forget Europe, probably 30-ish percent of the transactions are credit cards at higher bps as opposed to the U.S., which might be the flip of that. And most everything in Europe is chip and pin, on debit. So it's just you start out a little bit less. But the nice thing is, every time Kevin gives me an epay transaction across this network, that money falls straight to the bottom line. So that's the way you get your margins up.

Yes, that's really helpful. And maybe if I could just sneak one last one here. I just wondered if you could -- you're adding an asset in Greece. We've seen some reports out of Europe about some of these economies having a tough time with the vaccine rollouts and economies might be shutting down. So I was curious just to get your thoughts on kind of what you're seeing on the ground over in Europe.

Yes, that's a good question. So there seems to be -- I thought the U.S. was disorganized on its vaccine rollout, but now I found that there's somebody equally challenged, and that's the EU. But -- so, I guess, for -- with respect to this particular business, because it really effectively doesn't start for us until next year, I think those problems will be behind us by then. But just in general, we've seen a pause on vaccines in some of the Northern European countries and maybe a couple of other countries, and yet we've seen the U.K. just go like gangbusters. They're at 45%, 50% vaccinated and becoming more of the model for Europe. So we'll just have to see what shakes out over the next couple of weeks, but I'm sure they'll be back to vaccinating here pretty quick because the economies of Europe need it. I mean we think it's hurt our economy, which it certainly has. We've had a $1.9 trillion new bailout package for our economy. The reality is whatever happens bad to us, it happens worst to them. Because they just don't have as resilient of an economy as we do, and none of their banks are as strong balance sheet-wise either.

That concludes today's question-and-answer session. I'd like to turn the call back to Mike Brown for closing remarks.

Okay. My only remark is thank you for taking time out of your afternoon. Pleasure to give you updates on this as they come. Thank you for your time.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating.