Question-and-Answer Session
Operator
(Operator instructions). Our first question is coming from Cheryl Pate of Morgan Stanley.
Cheryl Pate – Morgan Stanley
Hi, good morning.
Ted Cecala
Good morning.
Cheryl Pate – Morgan Stanley
I just had a couple of questions. I guess, first of all, I wanted to check what did the UBS acquisition add to revenue for the Retirement Services business this quarter?
Ted Cecala
That's included in the number for the fourth quarter. We really don't break that out separately. But essentially, they covered their expenses in the quarter. So it's not a net plus.
Cheryl Pate – Morgan Stanley
Okay.
Ted Cecala
If you look at the Retirement Services line on our income statement, the majority of that increase is related to the UBS acquisition.
Cheryl Pate – Morgan Stanley
Okay. And then could you just speak a little bit about what you're seeing in terms of housing deterioration, trends within the region and how we should think about provisioning going forward, particularly related to the construction portfolio?
Bill North
Yes, Cheryl, it's Bill North. Yes, the housing market clearly has been soft for a while and certainly in the first part of '08 we saw that continue. And I think as everybody has seen and you probably heard from others, beginning probably in September/October, things have kind of softened even further, going down to a new lower level. So our residential developers have seen a slowdown on average in terms of the homes they're selling out of their projects. In this market, as has been the case for the past couple of years, the lower priced product continues to be the most attractive. And fortunately, even in the State of Delaware, especially in Central and Southern Delaware, because of land costs and development costs, you can still bring a product to market in the $200,000 to low $300,000 price point range. So we continue to see home sales, but obviously they're selling at a much slower pace.
And as Ted mentioned earlier, that's taken some of our developers that were kind of making do at the – let's call it the pre-fourth quarter pace and now that we're into '09 that sales pace has softened and some of these folks gotten to where they – they're no longer able to keep their nose above water. And quite frankly, when you look at the prospects for at least the first couple of quarters in '09, why we like to be – and we are optimistic, we're also pragmatic. And when you look at the landscape, realistically, we don't see anything that really stands out that indicates there is going to be a big part of the change or a big change I should say in the first half of the year.
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