UMB Financial (NASDAQ:UMBF) Corporation (NASDAQ: UMBF) has released its fourth quarter and full year financial results for 2023, showcasing robust performance with a full-year net income of $350 million, or $7.18 per share, and net operating income of $397.1 million, or $8.14 per share. The fourth quarter saw the company earning $70.9 million, or $1.45 per share, with an adjusted net operating income of $112 million, or $2.29 per share. Highlighting strong loan and deposit growth, expanding net interest margin and income, and solid fee income growth, UMB Financial appears well-positioned for future performance.
Key Takeaways
- Full-year net income reached $350 million, with Q4 earnings at $70.9 million.
- Net operating income for the year was $397.1 million, with Q4 adjusted net operating at $112 million.
- The bank reported a 6.3% annualized growth in average loan balances and a 17.2% increase in deposits from Q3.
- Net interest income rose by 3.7%, with a 3 basis points improvement in the net interest margin.
- Noninterest income for Q4 accounted for 38% of revenue, totaling $148.3 million.
- The effective tax rate for 2023 was 17%, with similar expectations for 2024.
Company Outlook
- UMB Financial expects loan yields to benefit from a flexible balance sheet and higher yields on new origination.
- Plans are in place to reinvest cash flows from securities into higher yielding loans or securities.
- A slight compression in net interest income and margin is anticipated for Q1 due to reduced liquidity and fewer calendar days.
- The company is focused on maintaining strong operating leverage.
Bearish Highlights
- Higher deposit costs have partially offset the benefits from repricing and deposit mix.
- Net interest margin and income are expected to face slight compression in the upcoming quarter.
- Operating expenses saw an increase from the previous quarter, primarily due to deferred compensation and technology investments.
Bullish Highlights
- UMB Financial experienced exceptional asset quality and solid fee income growth.
- Loan and deposit growth outperformed peer banks, with commercial customers leading the deposit increase.
- The company remains confident in its credit decisions, with a low charge-off rate and expectations to continue outperforming peers.
Misses
- The intentional reduction in brokered CD balances and potential volatility in corporate trust deposits could impact average deposit levels.
Q&A Highlights
- CEO Mariner Kemper (NYSE:KMPR) emphasized the company's drive to be influenced more by market share gains than economic conditions.
- The company sees a strong first quarter, indicative of a positive outlook for the rest of the year.
- $1 billion in club advances are set to mature in Q2, with strategic evaluations planned based on collateral needs and market rates.
- Minimal deterioration has been observed in the office portfolio, which is performing well with manageable short-term rollover.
UMB Financial Corporation's earnings call revealed a company that is not only proud of its past performance but is also strategically positioning itself for continued success. With a clear focus on growth through market share gains and a commitment to operational efficiency, UMB Financial is signaling a strong start to the year and is optimistic about its future trajectory.
InvestingPro Insights
UMB Financial Corporation's (NASDAQ: UMBF) recent financial results reflect a company that has demonstrated resilience and strategic growth. With a full-year net income of $350 million and a strong loan and deposit growth, the company's financial health appears robust. Here are some key insights from InvestingPro that could be of interest to investors:
InvestingPro Data shows UMBF's market capitalization stands at $3.94 billion, with a Price/Earnings (P/E) Ratio of 11.49, indicating the stock may be reasonably valued compared to earnings. The company's Price to Book ratio as of the last twelve months ending Q4 2023 is 1.27, which suggests that the stock is trading at a value close to its book value. Furthermore, a notable 3 Month Price Total Return of 30.61% highlights the positive investor sentiment towards the company in the recent quarter.
InvestingPro Tips reveal that UMBF has a commendable track record of raising its dividend for 31 consecutive years and has maintained dividend payments for an impressive 54 consecutive years. This consistency is a testament to the company's commitment to shareholder returns and financial stability. Additionally, analysts predict the company will be profitable this year, which aligns with the company's reported net income and adjusted net operating income.
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These InvestingPro Insights can offer valuable context to UMB Financial's recent financial results and guide investors in making informed decisions about the company's stock.
Full transcript - UMB Financial Corp (UMBF) Q4 2023:
Nick Moutafakis - KBW:
Nathan Race - Piper Sandler:
Operator: Hello all, and welcome to UMB Financial's Fourth Quarter and Full Year 2023 Financial Results Call. My name is Lydia, and I'll be your operator today. [Operator Instructions] I'll now hand you over to Kay Gregory with Investor Relations to begin. Please go ahead.
Kay Gregory: Good morning, and welcome to our fourth quarter 2023 call. Mariner Kemper, President and CEO; and Ram Shankar, CFO, will share a few comments about our results. Jim Rine, CEO of UMB Bank; and Tom Terry, Chief Credit Officer will also be available for the question-and-answer session. Today's presentation contains forward-looking statements, which are subject to assumptions, risks and uncertainties. These risks are included in our SEC filings and are summarized on Slide 45 of our presentation. Actual results may differ from those set forth in forward-looking statements, which speak only as of today. We undertake no obligation to update them except to the extent required by securities laws. All earnings per share metrics discussed on this call are on a diluted share basis, and unless otherwise indicated, comparisons are versus third quarter 2023. Net operating income discussed here and in our slides excludes the FDIC special assessment and certain other expenses and is reconciled in our press release and slide deck. Presentation materials are available online at investorrelations.umb.com. Now, I'll turn the call over to Mariner Kemper.
Mariner Kemper: Thank you, Kay, and good morning. Before I get started, I've got to talk about some very important business by congratulating our hometown heroes, the Kansas City Chiefs, we are yet again headed to the Super Bowl in a couple of weeks. Now, I'd like to discuss our fourth quarter and full year performance for 2023, a year that played out very differently from what we were expecting and I think the rest of you are expecting last year. During a particularly challenging period for the banking industry, UMB delivered strong results, demonstrating the power and resilience of our diversified business model. We closed out the year with a solid fourth quarter. I'll review a few highlights, and then Ram will add more detail in the Financial and Driver section. As you know, most banks recognize the expense for the FDIC special assessment in the fourth quarter. Our share of the assessment was $52.8 million, an impact of about $1.08 per share pre-tax to net income. We presented our financial metrics both on a GAAP basis and adjusted to exclude this charge. For the full year of 2023, net income was $350 million or $7.18 a share. On an adjusted basis, net operating income was $397.1 million or $8.14 per share. For the fourth quarter, we earned $70.9 million or $1.45 a share. However, as adjusted, net operating income was $112 million or $2.29 per share, representing an increase of 13.9% compared to the third quarter of 2023 and 10.8% compared to the fourth quarter a year ago. Our results reflected strong loan growth and deposit growth, expanding net interest margin and net interest income, solid fee income growth and exceptional asset quality. Average loan balances increased 6.3% on an annualized basis from the third quarter to $23.1 billion. For comparison, banks between $10 billion and $100 billion in assets that have reported results so far have shown an annualized increase of 3.6%. We posted strong top-line production, 40% above third quarter and in line with our levels in recent quarters. Construction and commercial real estate drove most of our loan growth in the first quarter with continued draws on previously approved construction loans. Payoff levels increased to 4.4% of loans impacting C&I balances. CRE growth has been largely in multifamily and industrial projects. Once again, we've included more detail on the portfolio in our slides, showing the mix of loans by type and geography, along with LTVs and other metrics. Asset quality in the book remains strong. We adhere to conservative standards, which includes underwriting to imputed or stressed interest rates and moderate loan to value ratios. We don't use trended rents and we have very strong liquid sponsors with great cash flow. 90% of our investment CRE portfolio is recoursed. Speaking of asset quality, we reported excellent metrics with improvements across the board. Nonperforming loan levels improved again to 6 basis points, delinquency levels declined and we saw an 11% decrease in classified loans. Net charge-offs were 2 basis points of average loans for the quarter and just 5 basis points for the full year of 2023. Again, we outperformed peer banks, which have reported a median net charge-off rate for the fourth quarter of 15 basis points so far. On Slide 26, we included a longer term history of charge-offs, which have averaged just 28 basis points over the last 20 years. In 2023, we experienced a 16 basis point reduction in our annual charge-off rate compared to 2022, reflecting the active management of our portfolio. I'm pleased with this result, especially given the environment and cautious narrative we're hearing across the industry. Again, we compare favorably to peer banks, which have reported a median 6 basis point increase and net charge-off levels year-over-year. Moving to deposits. Average balances increased 17.2% on an annualized basis from the third quarter. This growth was led by commercial customers, including 11% annualized increase in commercial DDA balances. We are seeing traction from our efforts to bring clients' total banking relationships to UMB. Peer so far have seen average annualized deposit growth of just 2.5% thus far in the quarter. Net interest income increased 3.7%, as margin improved 3 basis points sequentially. From industry reports so far, our NIM expansion compares favorably with peers reporting a median decline of 4 basis points. We continue to deploy cash flows from the securities portfolio into loans, and the pace of increased funding costs has slowed each of the past two quarters. Ram will share more detail and drivers on our margin outlook for 2024. Noninterest income for the fourth quarter was $148.3 million representing 38% of revenue, more than 2x the 17% median reported by peers. Our fee businesses continue to build scale and we're seeing momentum in several areas. A few highlights include fund services where assets under administration have eclipsed $411 billion, a $48 billion improvement over 2022 levels. And in our custody business, we have had a 27% increase and net new accounts this year. Our fixed income and trading team saw increased activity as the expectation that the Fed has finished raising rates and it's provided a little more clarity and brought some participants back into the market. We've shared additional detail on our fee income businesses and the revenue is provided by them in our slides, and Ram will add more detail when he speaks. Total revenue for the fourth quarter increased 4.3% from a linked quarter basis. We posted positive operating leverage of 1.3% on a linked quarter basis, and 0.3% in the year-over-year quarter. As seen on Slide 31, our capital position improved during the fourth quarter with a 17 basis point increase in both CET1 and total capital ratios, which stood at 10.94% and 12.85%, respectively. Our earnings continue to support our capital position in spite of the impact of the FDIC special assessment. Finally, we saw increased profitability ratios with operating ROTCE of 16.62% versus 14.96% in the third quarter. Tangible book value improved nearly 12% from September 30 to $58.12 per share. Fewer banks so far have reported a median tangible book value increase of 6.9% linked quarter. Overall, we had a very solid quarter, especially given the challenging year we all had. Before I turn it over to Ram, I'd like to share a few thoughts on the events of last spring but ultimately led to the FDIC's special assessment we recognized in the fourth quarter. It has become very clear that the underlying cause of the 2023 bank failures with interest rate mismatch primarily on the asset side, a few banks were ill positioned and poorly managed for the interest rate environment we found ourselves in, with a largely fixed asset base that lacked flexibility. One lesson learned during that time was the power of various market participants to fuel a largely media based crisis in circus. As the panic spread across media outlets, the risk of a self-fulfilling prophecy became real. Our reputation with our clients and in our markets is something we have earned and cherished over 110 years of history. It was extremely frustrating for us to watch these industry observers pontificate based on a lack of understanding of how the industry works and continue to focus on the wrong sentiments like unadjusted, uninsured deposits or AOCI. This was a classic case of facts getting in the way of a good narrative. As I've said before, thank you to you, the analysts and the investors on the call with us today, who took the time and care to understand the somatic of what transpired in the spring. Year-end reports have confirmed what we already knew to be true. The fundamentals in this industry remain steady. The demise of regional banks didn't happen as predicted and banks like ours that were well prepared have not only weathered the storm, but emerged stronger and with positive results. The resiliency of the banking industry has been evident and on display in recent months and the liquidity, regulatory capital levels, loan portfolio asset quality and funding sources remain strong. In closing, I'm incredibly proud of our UMB associates that drove this performance, and I'm deeply grateful to our loyal client base but grew with us through this much exaggerated industry noise in 2023. It was extremely rewarding to see how our company and customers came together to support each other. As always, we run our company with a strong focus on both the short-term and the long-term performance through every stage and every economic cycle, and we feel good about our strategy. Looking ahead into 2024, we see a muted but resilient macro environment, and we remain well-positioned for any environment with an attractive loan to deposit level, strong capital ratios and high quality loan portfolio. With that, I'll turn it over to Ram to give you more details on our results. Ram?
Ram Shankar: Thanks, Mariner. Net interest income increased $8.2 million in the fourth quarter to $230.5 million driven primarily by loan growth and repricing along with higher levels of liquidity. Net interest margin was 2.46%, an increase of 3 basis points from the linked quarter. Loan repricing and mix provided a 9 basis point benefit. Other positives included 3 basis points from the benefit of free funds and liquidity levels, including stable levels of DDA balances, 2 basis points from the securities portfolio and 1 basis point from changes in borrowing levels. These benefits were partially offset by higher deposit costs. Cycle-to-date, our earning asset beta has been tracking along with our total cost of funds beta, both now at 53%. Average deposits increased 17.2% annualized from the third quarter, benefiting from the ongoing deposit gathering initiatives across all our lines of businesses. The typical seasonal increase in public fund balances during the month of December, added $157 million in average deposits for the quarter. These increases were partially offset by the intentional reduction in brokered CD balances. Excluding those broker deposits, average deposits increased 22% annualized from the prior quarter. Additionally, corporate trust deposits tend to be a little bit lumpy as clients build up cash and make payments throughout the year. As the third largest municipal trustee in the U.S., balances will ebb and flow driven by municipal bond distributions and other activity. I'll note that on an end of period basis, corporate trust deposits increased, pointing to the timing differences throughout the quarter in our escrow, specialty trust and paying agent businesses. Our deposit remix continued at a slower pace this quarter. DDA balances increased 1% from the third quarter and now represent 31% of total average deposits providing the benefit to margin I noted. Cycle-to-date betas on total deposits and on loan yields are 48% and 59%, respectively. This is on-track with our previously discussed expectations for terminal betas of approximately 50% for deposits and 60% for loans. Looking ahead into the first quarter, we expect our loan yields will continue to benefit from the flexibility we built into our balance sheet through repricing as loans come up for renewal and from higher yields on new origination. Overall, we expect our loan yields to meet or exceed the increases in cost of funds. Additionally, we have approximately $1.6 billion in cash flows from our securities portfolio, rolling off at 2.2% that will be reinvested in higher yielding loans or securities. In the fourth quarter, we began legging back in with some modest repurchases of mortgage backed and treasury securities. We will continue to assess based on collateral needs, loan growth and overall market conditions. As liquidity and public fund balances seasonally dissipate and given one less day in the first quarter, we expect net interest income and margin to compress modestly from fourth quarter levels. Actual performance will be driven by material shifts in funding mix, especially DDA balances and the shape of the curve. Details and activities in our securities portfolio are shown on Slides 27 and 28. The combined AFS and held to maturity portfolios averaged $12.1 billion during the quarter, a decline of 1.5% from the third quarter. The average roll off yield was 2.38% for the quarter. The new purchases of $154 million shown on the table excluded $500 million of short-term T-Bills purchased at 5.39% as additional collateral for public funds deposit. Excluding those treasuries, we expect $1.6 billion of securities with a yield of $223 million to roll off over the next 12 months. The unrealized loss position in our combined securities book improved this quarter to $1.1 billion, representing approximately 8.5% of the total portfolio, down from 14% in the third quarter. Back to the income statement, our provision expense of zero this quarter was the result of payoffs on net loan growth, the quality of our portfolio, including the low level of net charge-offs and macroeconomic variables that seem to and a softer lending. As we look into the first quarter, we expect provision to be impacted by a small acquisition of a co-brand credit card portfolio expected to close in March, which will add approximately $125 million in balances with a day one provision of roughly $6 million and ongoing provision based on portfolio performance, growth and macroeconomic variables. This acquisition will also add approximately $10 million in net interest income, $2 million in interchange fees, and a breakeven pre-tax pre provision in the first year, excluding conversion and integration costs. On the fee income side, reported results included some market related variances, including increases of $3.7 million in company owned life insurance income and $567,000 in customer related derivative income. Trading and investment banking income increased $2 million primarily related to municipal trading volume. The detailed drivers of noninterest expense are shown in our slides and press release and on a GAAP basis, included the recognition of the $52.8 million FDIC special assessment. On an operating basis, expenses increased $6.9 million or 3% from the third quarter to $235.9 million. Detailed variances are included on Slide 22, but the largest impacts were $3.1 million in deferred compensation expense, an increase of $2.7 million from the prior quarter. This is the offset to the increased COLI income, $2.3 million related to the pre buy of computers in the fourth quarter and $1.5 million in additional charitable contributions. Partial offsets included a $1.6 million decrease in payroll taxes, insurance and 401(k) expense and a $467,000 reduction in bonus and commissions expense. Excluding the onetime items and timing related variances, our core expense run rate in the fourth quarter was approximately $230 million. Please note that in addition to the impact of the Cobrand card portfolio acquisition, first quarter salary and benefits expense will increase with the impact of the extra leap year day and for the typical seasonal reset of FICA and payroll taxes. Our effective tax rate was 17% for the full year 2023 compared to 18.9% in 2022. The decreased rate was driven primarily by a larger portion of income from tax exempt securities and variations in levels of COLI income. For 2024, we would expect a similar tax rate ranging from 17% to 19%. That concludes our prepared remarks, and I'll now turn it back over to the operator to begin the Q&A portion of the call.
Operator: [Operator Instructions] Our first question comes from Chris McGratty of KBW.
Nick Moutafakis: Hi, this is Nick Moutafakis on for Chris. Maybe just to start out on the margin, given the potential for rate cuts coming later in this year in '24. Can we see the margin continue to expand into '24 with more back book repricing and continued mix shift?
Ram Shankar: Sure, Nick. This is Ram. We don't give any forward guidance other than what I said in my prepared comments about there might be some modest compression in first quarter because of the excess liquidity that we saw in the fourth quarter going away. But as we've said in the past calls, right, the higher for longer scenario is a good scenario for us because as you've seen in the last couple of quarters, the pressure on deposit costs have largely abated for us. And then our loan yields are still repricing higher. So loan yields will at least do better than cost of funds for us. And then that's the $1.6 billion of securities that are rolling off at 2.2% that we can invest in the current rate environment. So, I think we're close to the trough on margin. Any particular quarter, it might ebb and flow a little bit, a few basis points here and there, but feel good about our margin trajectory, until the fed starts cutting at some point in '24.
Mariner Kemper: And some of the nuance one way or the other, the strength of what happens to our demand deposits also hangs in the balance.
Nick Moutafakis: And maybe also depends on the revenue outlook, I guess, a little bit, but could we see positive operating leverage in 2024 depending on the expense growth?
Ram Shankar: Well, I think the, we remain focused on operating leverage. And again, based on the guidance question, we don't really give guidance. What I would say is that, the environment that we come into 2024 with from 2023 remains from the standpoint of elevated interest expense and the interest rate environment. And because of that, demonstrating absolute strength on the operating leverage remains challenging. We'll continue to do everything we can and work against it. We believe on a relative basis that will outperform on operating leverage.
Operator: [Operator Instructions] We have a question from Nathan Race of Piper Sandler.
Nathan Race: Just a question on the NII sensitivity. I appreciate the disclosure in the background 100 basis point decline in rates is about a 3.1% impact to NII in year two. Just curious to what extent you think that can be offset by just the volume kind of continued margin accretive growth in both loans and deposits going forward and also with the cash flow you have coming off the securities portfolio as well?
Ram Shankar: You hit the nail on the head there, Nate. That is a static analysis, as you know, right? So it's all based on just cash flows coming in and being reinvested in a new environment. And so the net interest income projected in that baseline scenario of minus 100 and year two does not include the impact of any growth. And any actions we might take, right? You've seen us and you've seen our disclosures that we put on some swaps synthetic hedges as well. So we'll do additional, we'll evaluate it on a periodic basis and put on additional hedges to protect ourselves from a down rate environment. But that's just a statistical modeling of what would happen to our balance sheet. If all things were kept the same on a static balance sheet basis. So we can take steps to mitigate it and so that's another layer that we'll add on to it.
Mariner Kemper: And as you think about looking forward into '24, we typically give you a 90-day look forward. Loan growth in the first quarter, it looks stronger than it did in the fourth quarter. So signs continue to be good.
Nathan Race: And then just within that context around kind of the NII trajectory and deposit costs, I think you guys have about $2.5 billion in wholesale funding maturing in the first half of this year. How are you guys thinking about replacing the cash flow securities book is going to be one lever and then, any other kind of thoughts on just how we should think about those wholesale sources in the first half of the year?
Ram Shankar: On Page 31, on the bottom right, we have all the wholesale funding. Obviously, as you can see, we have about $1.6 billion of brokered CDs. Given our deposit pipeline, which remains strong. We might not need all of it, right? So but there's a potential the way when market rates are at that point and we may lag in for half of it or something less than that. The other one that's maturing that will mature in the second quarter is the $1 billion of club advances and then we have BTSP, which will extend into January. Again, we'll evaluate it based on collateral needs. We'll base it on where market rates are. We'll look for spread and all those things. But we don't need any of those tools really given our liquidity position and our loan to deposit, but we'll take it as the environment evolves.
Mariner Kemper: I think that Ram’s comment about the brokered CDs. We may -- we don't need them, but we may roll back into some of them just because by the time they come due, rates will likely have come down and we can have positive arbitrage on them. So, it might make sense to roll back into some of them just from a profitability standpoint.
Nathan Race: Maybe just turning to credit. Curious to hear perhaps sometime in terms of what occurred in the quarter in terms of criticized classified trends and obviously charge-offs have been very low over the last few quarters. And I think in the past, we've talked about a normalized charge-off range in the 20 to 30 range. So just curious, just given where NPA stand and based on the commentary around criticized trends, if you think we're going to get back to that historical range at some point this year or into 2025?
Mariner Kemper: Nate, that's my favorite question, because it's the thing that we're really most proud of. And I think that when you think, I think about this investor community and looking at your alternatives and the investment pieces looking into banks, the thing that you look at with us I'm sitting at the table right here with two other guys that have been making credit decisions with me for 20 years through all of the cycles that we've looked at and we've outperformed the peer group in all of those cycles. And when we talk about 27, 28 basis points, we're just using math history. If you look at Page 26, you're just looking at our history. And one thing I would note about that in our investment deck is while, yes, the average over 20 years is higher than the 2 basis points we have in the fourth quarter. You have to recognize that comes with a lot of growth. So, if you go back 20 years ago, the first year I was CEO, we had $2.7 billion in loans, with 20 basis points of charge-off. Today, we have $23 billion in loans with 2 basis points of charge-off. So, in the context of much greater opportunity for loss, we've maintained a very, very low charge-off rate and that's because of consistency and continuity of approach. And we make this easy for you guys because you can look at the history. Most of the banks you look at have different teams and turnover and change and strategy change and acquisitions or whatever it is. You're staring at the same company with the same team with the same results. And what I would say about 28, when you think about this year, wherever we end up, we will outperform. And what I would, if you look at the charge-offs history over the last 20 years us against the peer, we have a chart the second the page before that shows. It's in a different, it's in a -- we have a chart that shows us against the peer group. And if you, the point is, if you look at our recessionary period, our line, our Dallas line stays very close to the bottom axis of the chart, while there's a sharp fin that takes place with the industry. So, that's what happened in the last crisis. We expect that to happen. If you look at it through the fourth quarter, you can see it already taking place. Our numbers don't move and the peer groups and the industry starting to move up. We expect that to be the case again. Whatever the absolute numbers are, I can't tell you. But the relationship to the peer group and the industry, we expect to remain the same.
Nathan Race: And just one last one. It seems like a lot of the growth in the quarter came on the commercial real estate side of things. So, just curious, in terms of the composition of the pipeline entering 2024 and kind of where you guys are seeing pretty pronounced opportunities to grow loans today?
Mariner Kemper: Loan growth, we've been saying this for a really long time. We call it we have a long runway for growth, both geographically, vertically, across our footprint and our national footprint related to our ABL business, largely because of market share gains. We expect that to remain the same. The caveat to that would be, if we do have a softening economy, the rate at which we would grow on an absolute basis may come down from what our expectations are of ourselves, but on a relative basis, we would expect ourselves to continue to outperform on loan growth for the same reasons we always have for 20 years we've done that. And we expect that to continue again for the very same reasons, which would be more market share driven than they are economic conditions driven. So, nothing new there. The absolute number could come down a bit from what we did last year based on what the economic conditions are. But again, year by and on a relative basis and we would expect ourselves to outperform on a relative basis, again.
Ram Shankar: Market specific, it's still coming from the major metros. Utah has been a nice growth market for us, and where we have loan production office and that seems to continue to build. But we are seeing a strong traditional operating company C&I and as Mariner stated, it's market share driven.
Mariner Kemper: And first quarter, as I said, looks stronger than fourth quarter if that's any indication, right? We have a harder time ourselves looking beyond the first quarter, but first quarter is an indication of the rest of the year, it's stronger for fourth quarter pipeline wise.
Nathan Race: And if I could just ask one last one. You guys see any change in credit ratings across I think around 4% of loans that are tied to office CRE?
Mariner Kemper: I'm not sure I understand the credit rating question. What do you help me understand that?
Nathan Race: Risk rating, excuse me, Mariner. We've seen this with the migration exercise classified risk rating, excuse me.
Mariner Kemper: We've had very little if any deterioration in our office portfolio, it's remained strong. It's 4.5% of the portfolio as you said. A couple of statistics, 45% of our office portfolio is single tenant, which adds a layer of strength there in terms of rollover, strong sponsors which we've talked about in the past. We have seen basically no deterioration in that portfolio and don't really see anything coming on the horizon. They're performing a lot of the leases, the underlying leases on these office projects go out to 27 and beyond roughly 70% of those leases are 27 and beyond. So in terms of rollover in the short-term are very manageable.
Mariner Kemper: Thanks everybody. It looks like that's the last question. Just want to reiterate something. We're really proud of the year we had in the quarter and I think at the end of the day, we do what we say and we say what we do and we've been doing it for a long time. And we've demonstrated strong outsized loan growth, deposit growth, fees, expense control, year-in and year-out. And I think the good news for the investor population as they think about us, is you should know what to expect from us. And we did it again in the fourth quarter and we're more thrilled than ever about the fourth quarter, because we were able to sort of put to bed a lot of the nonsense, and the narrative. And as I like to say, don't let facts get in the way of a real exciting narrative that the pundits like to deliver last year. And so on behalf of everybody on the call, we're happy to have delivered, what we did in the fourth quarter to kind of put some of that nonsense to bed. And so we'll just keep doing it for you. And we're really proud and excited about what we delivered and we're just going to keep doing it for you. So thanks.
Kay Gregory: Thanks, Mariner. If anyone has follow-up, you can always reach us at 816-860-7106. And we appreciate your time. Thanks for joining us today.
Operator: This concludes today's call. Thank you for joining. You may now disconnect your lines.
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