UMB Financial Corporation

Good day and welcome to the UMB Financial first quarter 2021 financial results conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask questions, you may press star then one on a touch tone phone. To withdraw your question, press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Kay Gregory, Investor Relations. Please go ahead.

Good morning and welcome to our first quarter 2021 call. Mariner Kemper, President and CEO, and Ron Chonker, CFO, will share a few comments about our results. Jim Rine, CEO of UMD Bank, and Tom Terry, Chief Credit Officer, will also be available for the question and answer session. Before we begin, let me remind you that today's presentation contains forward-looking statements, all of which are subject to assumptions, risks, and uncertainties, including the currently unknown potential impacts of the COVID-19 crisis. These risks are included in our SEC filings and are summarized on page 42 of our presentation. Actual results and other future circumstances may differ from those set forth in any forward-looking statement. Forward-looking statements speak only as of today, and 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. Our presentation materials and press release are available online at investorrelations.umb.com. Now, I'll turn the call over to Mariner Kemper.

Thank you, Kay, and thanks to everyone for joining us today. I hope you and your families remain safe and healthy. First quarter was a great start to 2021. We had strong balance sheet growth supported by stable, diverse funding sources, continued fee income momentum, and solid asset quality metrics. All core elements of our investment thesis delivered on a consistent basis. Consumer sentiment is slowly returning to more normalized levels, and our customers remain cautiously optimistic. Modified loan balances are now close to zero, and we've seen debit and credit card spend returning to pre-pandemic levels. Operationally, it's status quo. As most of our non-branch associates remain remote, the majority of our branches reopened with regular hours earlier this month, and traffic continues to be normal, as expected. Turning to our first quarter results, net income was $92.6 million, or $1.91 per share. And pre-tax, pre-provision income on an FTE basis was $108.7 million, or $2.24 per share. You may have noticed our quarterly deck has been updated with a refreshed look and additional information. We listened to the feedback from many of you and have a concise quarterly financial section followed by more detail on our various businesses, showing metrics and drivers in each. and a longer-term view of metrics supporting our investment thesis is included for those who may not know our story as well. Slide 17 shows the primary drivers behind our results, and I'll provide some high-level comments, then turn it over to Ram for more detail. Net interest income was essentially flat from the fourth quarter, as the positive impact from strong balance sheet growth was mitigated by lower loan fees and PPP income, as well as the day count in the quarter. On a year-over-year basis, net interest income increased 11.6% despite a challenging interest rate environment. Our track record of relative outperformance in asset growth and the opportunities we see to continue bode well for our ability to grow net interest income over time as we gain market share in many of our unconcentrated markets and verticals. The income for the quarter was impacted largely by swings in investments, security gains, and losses. In the first quarter, the valuation of our position in Tattooed Chef drove a $16.1 million mark-to-market unrealized loss compared to the $108.8 million fourth quarter gain. Excluding market fluctuations, there were some bright spots as we continue to focus on growth in fee income. Trust and securities processing income increased 8% from the fourth quarter and nearly 17% on a year-over-year basis. The businesses that drive that line have experienced solid growth, benefiting from both market appreciation and new sales activity. In fund services, assets under administration now stand at $345 billion, compared to $252 billion a year ago. Specialty Corporate Trust launched internationally during the quarter, opening an office in Dublin. which is a top economic center for structured finance. We're excited about the potential for growth. This adds to our aviation trust business, as well as opportunities to expand our offerings and other business lines. We are also eagerly anticipating the potential for increased spending related to the proposed infrastructure bill, which could be a great opportunity for both our underwriting and corporate trustee business. Our investor solutions team continues to focus on growth and FinTech clients with opportunities to provide FDIC suite and passive custody services, among others. We added four FinTech relationships in 2020 and have an active pipeline. And we're seeing some traction from recent investments in our private wealth space, where we've added reporting and trading capabilities for a variety of investment types. During the quarter, we brought on a new CIO for our family office business, and look forward to developments there. On the digital front, we've seen increasing use of our online account opening and mobile offering. 20% of non-mortgage loan applications and 22% of new retail deposit accounts were initiated online in the first quarter. General engagement with online banking is up nearly 16% from first quarter last year, which shows that people are using our digital tools to track, monitor, and transact their accounts. After several years of investing in customer-facing applications, our digital capabilities are competitive, and we are now focusing on growth and penetration. And while we've had new delivery channels as industry dynamics have shifted, we haven't forgotten the importance of connecting with our customers. Moving to the balance sheet, we once again posted strong loan growth with an 8.4% linked quarter annualized increase in average balances, excluding PPP, Slide 23 is a snapshot of our diverse loan portfolio, followed by quarterly loan activity. In CRE, we're seeing traction in our expansion markets. Growth in C&I came from a variety of industries this quarter, including materials and commodities, technology, and commercial services. Additionally, our success in building our mortgage capabilities has continued, as evidenced by the nearly 7% increase in average residential mortgage loans from the fourth quarter of 2020. which are included in the consumer real estate line on the balance sheet. New originations for the quarter were $689 million outside of PPP balance changes, with payoffs and paydowns of 3% of loans. Looking into the second quarter, we see a robust pipeline in both CNI and CRE, despite some uncertainty related to the COVID trends and the status of reopening in various markets. Given what we know today is reasonable to expect, our strong momentum and market opportunities should continue. Our core deposit growth continued, driven by our institutional business, along with the seasonal buildup of public funds and the impact of the recent stimulus payments. Average balances increased 7.5% on a linked quarter basis and 28.8% compared to the first quarter of 2020. CDA growth helped drive the cost of total deposits to just 10 basis points. leading to a total funding cost of 16 basis points. Our average loan to deposit ratio, while typically much lower than our peers, was 61% for the quarter. Our differentiated customer base, which drives diverse sources of funding and revenue, comes with larger deposit balances. Rahm will provide more detail about how we're managing our liquidity position in this environment. On slide 25, we've updated our exposure to sensitive industries. As we've moved further through the pandemic, we've adjusted this list to reflect both the characteristics of our portfolio and the evolving outlook for various categories. Changes this quarter include the removal of oil and gas based on our borrower performance and stabilizing oil prices, and of student housing and CRE where industry occupancy levels are improving. Loans in the three remaining categories total 1.4 billion or 9.2% of loans, excluding PPP. After our typical analysis of mitigating factors, including strong sponsors and guarantors, we feel that approximately 765 million or 5.1% of loans could possibly carry more risk in a prolonged crisis. As always, we remain in close contact with these borrowers. At the bottom of the page, you'll see that our modified loan balances have continued to decline, ending the quarter at just $14 million, under one-half of 1% of loans. On the credit front, net charge-offs averaged just 13 basis points of loans, while levels of non-performing assets improved from the end of the prior period. As we noted last quarter, improving macroeconomics conditions and the continued quality of our loan portfolio improved. drove the $7.5 million negative provision. As the economic backdrop continues to normalize and business conditions improve, additional releases may be warranted. Total allowance for credit losses on loans stand at $202.8 million, with an allowance to loan coverage of 1.23%, excluding PPP loans. That coverage is 1.34%. To wrap up, I'm pleased with our first quarter performance and I'm excited about the opportunity we see in the remainder of 2021 and beyond. Our 2020 Corporate Citizenship Report has just been published and is available on our website. It highlights our continued efforts and actions related to the environmental, social, and corporate governance issues. We continually adapt to find the right balance of implementing sustainable business practices building diverse teams, meeting obligations, and using our resources to do good. This balance has helped guide our response to the COVID-19 crisis. Now I'll turn it over to Ram for a few comments. Ram.

Thank you, Mariner. Net interest income of 194 million was comparable to the prior quarter and included approximately 13 million in loan income from PPP balances. On a link quarter basis, NII levels were flat as the benefits from earning asset growth were mitigated by the impact of two fewer days as well as lower loan fees. Loan yields were 3.75% compared to 3.78% in the fourth quarter, and total earning asset yields decreased 21 basis points to 2.74%, due largely to the $1.8 billion of increased liquidity. Our Fed account, reverse repo, and cash balances averaged $4.5 billion in the first quarter, comprising 14% of average earning assets and yielded 32 basis points, compared to $2.6 billion, or 9% of earning assets, and 45 basis points in the fourth quarter. The excess liquidity buildup reflects seasonal inflows from our public funds and other businesses, as well as the benefits from federal stimulus programs. The 19 basis points decline in net interest margin on a link quarter basis was driven largely by excess liquidity. If those balances had remained consistent with prior quarter, our reported net interest margin would have been 16 basis points higher. Additionally, if the liquidity levels were consistent with historical averages from pre-pandemic levels, our margin would be approximately 30 basis points higher. As Mariner mentioned, our business model makes our experience unique. The seasonality of funding from our municipal clients and large institutional volumes, including in our aviation trust business, add variability to our liquidity positions. Besides funding loan growth opportunities, we continue to deploy a portion of this liquidity, as well as cash flows from our securities portfolio, to increase our AFS portfolio footings, as evidenced by the $2 billion increase in these balances from last year. During the quarter alone, we purchased $1.3 billion of securities that yielded 1.42%. Given the excess money supply in the system, our near-term focus will remain on deploying these funds prudently and patiently with a focus to increase net interest income. Looking ahead, the margin trajectory will largely depend on the levels of liquidity, pace and timing of PPP forgiveness, and reinvestment rates on cash flows in the securities portfolio. Overall, we would expect some modest margin pressure in the second quarter. Non-interest income was $108.9 million for the first quarter and contained a $16.1 million pre-tax loss on the valuation of our TTCF investment, which was partially offset by mark-to-market gains on equity and other holdings and $4.3 million in gain from the previously noted sale of Prairie Capital Management at the end of March. Additionally, Coley income decreased $4.4 million with its typical offset in reduced compensation expense. The details of our various fee income lines are shown on slide 21, and Mariner commented on some of the growth opportunities we have seen in several of those businesses. On the expense side, we saw a reduction of $25.9 million from the elevated levels we discussed in the fourth quarter. Legal and consulting expenses moderated from the prior quarter and incentive compensation declined, partially offset by the seasonal increase in FICA, insurance, and 401 expense. The tax rate was 15.4% for the quarter. For the full year 2021, we anticipate it will be approximately between 15 to 17%. We continue to maintain strong capital ratios with our total risk-based capital at 14.28%, CET1 ratio at 12.25%, and leverage ratio at 8.08%. Our tangible book value per share increased 12.2% during the last 12 months to $57.26 at March 31st. That concludes our prepared remarks, and I'll now turn it back to the operator to begin the Q&A portion of the call.

We will now begin the question and answer session. To ask a question, you may press star, then 1 on a touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, press star, then 2. At this time, we will pause momentarily to assemble our roster. And the first question comes from Ibrahim Poonawalla with Bank of America. Please go ahead.

Good morning.

Hey, good morning, Ibi. Hey.

I guess just the first question, and I'm sticking with net interest income. One, to clarify, your guidance for modest pressure in 2Q is, I'm assuming, for the gap margin, right? Secondarily, just talk to us in terms of how you're thinking about cash deployment. Do you see some of the deposit liquidity leaving the bank? And if not, do you expect to operate with these elevated liquidity levels in the near term? Just give us your thought process around managing liquidity versus investing in the bond book.

Yeah, sure. Morning, Abraham, Samariner. I'll start with some high-level sort of background information and Rom can talk about our deployment strategies and the things we're doing. I think the first thing I'd say is, you know, the whole industry obviously is dealing with excess liquidity between, you know, stimulus and PPP. We're all sitting on a lot of liquidity. For UMB, in addition to that, you know, we have a pretty decent sized institutional book of business, which also is carrying excess liquidity at this time. So, you know, the thing about as we monitor this, not only is it sticking around, but it's growing. So on a year-over-year basis, we're up, you know, 30% in deposits. And it's really hard, no matter what you do, to keep up with that. And so that's kind of the backdrop. And I would say we – oftentimes people say, so what are you doing about that liquidity as if we're not doing something about it? But you have to also recognize we have industry-leading loan growth. So I feel we're doing a pretty good job of deploying it in general, and it's just a tough thing to keep up with. We are doing several things, and I'll ask Ron here to tell you what we're doing. about it on a go-forward and prospective basis.

Yeah, sure. Ibrahim, as I said in the prepared comments, right, so we have been pretty active in deploying this liquidity. You can see it in our balance sheet. Our AFS portfolio is up about $2 billion from a year ago. And just in the first quarter alone, we bought about $1.3 billion of securities, both mortgage-backs and some munis as well. So we are being very active in deploying this And we're also looking at other options given, you know, some of this liquidity is going to be here to stay with us until, you know, another six to eight quarters. So we are overbuying bonds in excess of what our cash flows from our securities portfolio is doing. And then at the margin, true to what our UMB culture is, we'll also do investment options like we'll buy small pools of mortgage loans. You know, I'm not talking anything big, $100, $150 million. We're doing tri-party reverse repos. And then when available, you know, we've – done, you know, 25 to 50 million in a diversified pool of sub-debt of other banks. So we continuously evaluate all the options in front of us so that we can deploy this liquidity so that a lot of this liquidity isn't, you know, earning 10 basis points at the Fed account. But, yeah, we are really active in looking at different options to deploy this liquidity. And then the first part of your question, just to clarify, yes, on a gap margin basis, some modest pressure in the second quarter. But, you know, to round out this conversation, at the end of the day, we're really confident between our loan growth and what we're doing on the securities portfolio with the deployment that net interest income should be a differentiated story. And that's our investment thesis, as we've highlighted in our investor deck.

Yeah, I said that last quarter. I mean, it's NII right now in this interest rate environment. we really feel like it should focus on our ability to grow earnings through NII.

Understood. So I guess the message is the 180.7 in ex-PPP NII. That should be headed higher from here. And Ram, do you have the details on the remaining PPP fees and just any sense of the breakdown of round one versus two, how the forgiveness proceeds?

So, we have another $25 million of unrecognized revenues from PPP1 and PPP2 left. Again, the calendar of when we get to recognize this will depend on the forgiveness process. Obviously, we have about 10 million left on our PPP1. So, that's probably coming through in calendar year 2021. At this point, it's too early to say about this PPP2. we did originate about $420 million as part of the PPP2 program that you'll see on our balance sheet.

Got it. And just moving, Mariner, so obviously I think revenue growth, above average loan growth has been sort of a differentiating aspect for UMB. Just looking at the loan production levels, I guess in one of your slides, 24, that declined year over year and was weakest in the last five quarters. Anything going on there? Does that speak to just borrowers being in a wait-and-watch mode? And knowing what you know now, do you expect core loan growth to be in that high single-digit, slow double-digit range for the year?

I'm trying to – so 25. Slide 24.

Slide 24, you're seeing – It says gross loan production is down year-over-year –

I think that's just timing. That's mostly a timing. We continue to see growth across the board. There's nothing to that story, really. You know, the one headwind we have on our C&I business is just lower utilization. And that's a significant opportunity as we roll forward is as the economy opens up and things normalized, we've got about four percentage points off our regular utilization rate. And I know everybody's talking about that, but that's latent earnings power there and growth. But we're making up for that really across the board, I would say, both geographically and vertically. And that slide's just more of a timing thing on a year-over-year basis. So we look at second quarter, as I've mentioned, my comments look – uh, looks, uh, you know, strong.

Got it. And just one last one, if I may, uh, in terms of capital deployment, talk to us means you talked about some FinTech partnerships. You've previously talked about bank MNA, uh, give us a sense of where your mind's at in terms of, uh, ability to deploy capital in, in organically.

Yeah, we're, um, I, I, I don't really have anything new to say than what I've been saying for some time there, you know, where, where we have an active, uh, M&A process. We are actively having conversations with other banks, and we're just looking for the right deal, and we're not going to go do something just to do it. So we're looking for the right deal, and it's just an active process. And on the non-bank side, as we said before, we're always in the market looking for bolt-on opportunities for our corporate trust business, our public finance business, our fund services business, which, by the way, year over year, we were up $100 billion in assets under administration in our fund services business. So across the board, our institutional businesses are very, very strong, and we are always looking for those bolt-on opportunities to continue to consolidate.

Ibrahim, this is Jim Ryan. On the FinTech side, those will continue to be partnerships where we'll offer our banking as a service products and open up our balance sheet and services for those companies where we'll do the bank-in-a-box type model, offer FDIC sweep, our account services, and debit cards, et cetera. So that will provide the additional fee income and partnerships with those folks versus – looking to acquire unless the opportunity is right.

And do you break down the contributions from these partnerships or the kind of the FinTech fees or deposits?

We do not make that public separately from the roll-up.

All right. Thanks for taking my questions.

The next question comes from Jared Shaw with Wells Fargo. Please go ahead.

Hi, good morning. It's actually a team or Brazil are filling in for Jared. Maybe first on, on expenses, a great quarter for expense run rate. And if I recall correctly, I think there was a little bit over 9 million of kind of seasonal payroll expense in the quarter. As we look ahead, does all of that fall through to the bottom line in the second quarter? Some of that rolls off or are there going to be investments made that's going to offset some of that reduction?

Tom, why don't you take that?

Yeah, like we said last quarter, Timo, right, our expense run rate is about $200, $202 million. Any particular quarter, it goes up and down. But you're right, there are some seasonal increases that are typical to the first quarter, like FICA, so that can decrease by $3 to $4 million as you go into the second quarter. And then a large part of our expense base, as I've said before, is also variable rate in nature, right, bonus and commission. So when bond trading or other business activity is really strong, that can also skew our expense from one quarter to another quarter. The one thing that I would say in terms of, you know, looking ahead, right, we announced the sale of Prairie Capital Management. And, you know, annually that's about $15 million of expenses. So you'll see that recede starting the second quarter. So as you think about expenses going forward, I would model it that way as well.

Okay, that's good color. And then maybe if I can just follow up on Ibrahim's question on loan growth. It's been a couple quarters now where the conversation has been about growing balances and underrepresented markets. I'm just wondering, A, how much more runway there is there? And then B, in the back end of the year, some of the more traditional pipelines come back online. Should we expect to see growth accelerate from here? Or is this kind of a good level to see loan growth going forward for a longer period of time?

Yeah, so what I say about that is that it's much longer than a couple quarters. We've got kind of a decade of close to double-digit loan growth behind us, and we don't really expect anything different in the future than what we see in the past. The commentary about that penetration is, there's a pretty big long-term runway across our footprint as you think about penetration. So almost every market we're in outside of Kansas City is larger by population and business activities than Kansas City, and we have very low market share in almost all of them. So through just pure execution and having the right teams on the ground, we've got a really long runway really across the board, both geographically and vertically.

This is Jim Ryan. And what that means is it's not dependent on the economy. Generally, we're taking market share, which is someone else's client. So when we are obtaining market share, we're taking business that's already there that is not necessarily dependent upon the current economic activity. So as we grow our market share in those particular markets, It doesn't have anything to do with the economy. It has to do with our sales efforts.

Okay, thank you for the question.

Thanks, Timur.

The next question comes from Chris McGrady with KBW. Please go ahead.

Hey, good morning.

Morning, Chris. Morning.

Ron, maybe I'll start with you. The $15 million, just for modeling purposes, the $15 of expenses from Prairie, could you provide the revenue run rate that we need to remove as well?

Yeah, if you look at the last couple of years, it's averaged about $16 to $18 million, mostly in fees. All of it is fees.

$16 to $18 million.

And that contribution is anywhere from $2 to $3 million. Okay.

Yep, got it. Okay, and then just kind of putting the pieces together with the constructive outlook on revenue and the good expense quarter, I mean, you had positive operating leverage last year. Is that kind of base case for this year given where we are economically?

I think so. I mean, generally it's hard to tell. There are a lot of moving parts, but – I guess what I'd say is we do feel strongly that we've got our expenses under control, and we do feel pretty strong about our revenue profile. So absent any headwinds or challenges that come our way, we do feel like some level of operating leverage is reasonable to expect. Yeah, I would agree with that.

And then on credit, we've seen a lot of banks just move the reserve down because of the improvement in the economy. I think you alluded to that further releases could be on the horizon. How do I think about where I'm the trough, I guess, where you get to and when relative to day one of last year with CECL?

So, as a mariner, we're very – careful about this and cautious about it because we think that, um, you know, the reserves are there for a reason and our business, we're in the risk business and, you know, so we're, we're monitoring it closely. And obviously in the methodology, you've got qualitative and quantitative, the quantitative stuff's going to be what it is, uh, driven by the performance of our loan portfolio and the growth of our loan portfolio and the Moody's, um, around economic activity and unemployment. So that piece will be what it will be, and then we will overlay some qualitative things based on other uncertainties and such to make sure that the reserves are there to protect us and protect our shareholders. So on the trajectory that we're on right now, it is very reasonable to expect that we would do another release in the second quarter. What that looks like, how big it is, we're not prepared to give you any real guidance on that.

That's great. And then lastly, if I could, I just want to make sure, I saw the announcement on the buyback, which I know you kind of authorize every year, but I'm putting the pieces together and what you said last quarter, Mariner, I mean, that's still kind of bottom of the rung in terms of priorities with capital today, buybacks?

Absolutely. Our number one focus is to grow shareholder value through investing in growth. That's the number one priority.

Got it. Thank you.

Thanks, Chris.

As a reminder, if you have a question, press star then 1 to be joined into the queue. The next question comes from Nathan Race with Piper Sandler. Please go ahead.

Yep. Hi, guys. Good morning. Good morning, Nate. The growth on the institutional income side has been pretty impressive over the last few quarters. Just trying to get a sense of kind of that growth rate on the asset servicing and corporate trust side of things. It's sustainable kind of near the rates that we've seen recently. Or if you guys are expecting somewhat of an acceleration just based on some of the pieces that have been put in place recently?

I'll take that, start with it, and then Jim can jump in. But what I would say about social sick fund services, with all the liquidity that's in the system right now and what has happened with interest rates, The pursuit of return has been pretty accelerated, which has driven a lot of activity in the alternatives and privates over the last few years. I don't see that slowing down. And our fund servicing business is set up. We are one of the largest and most successful players in the private and alternative space. And so what you've seen is us benefit from that activity of liquidity and the move from public investing to private investing. We don't see that slowing down. We expect to continue to be a major recipient of that shift in the way money is being invested. Along with that, you have the democratization of private investing, which is gone much further downstream into the spectrum of who can invest in privates. So all that bodes really well in the fund space for the privates and alternatives. So that's what I'd say is the backdrop for our fund services business. Pipeline's very strong. Technology platform's great. We're efficient. We've got a top-flight team. We've been able to pick off people from all our competitors. And because of all the consolidation in that business, it's sort of put a lot of our competitors on the sidelines. So we're very excited about what's happening in fund services. Corporate trust business. We continue to consolidate there, and that business is poised really well for when and if, I'm going to say when because I believe it's likely to happen, the infrastructure bill comes through, we'll be poised on a national basis, both through corporate trusts and our public finance business to underwrite, sell, and do all the escrow trustee services really across the country. We have offices in New York now. We're doing business in Florida, New York, New Jersey, LA, large, large projects, hundreds and hundreds of millions dollar type projects, which is a big shift from the kind of size deals we were doing prior to opening offices on the coast. We're kind of clipping on the heels of number one and number two as the third largest trustee and paying agent in the country. We're looking for consolidation opportunities there. Our specialty business in the aviation space, we're very excited about, particularly as the economy is starting to open up again. That means in the Boeing issues resolving themselves. That means planes are going to be getting bought and sold across the globe. Our Irish office in Dublin allows us to do business now in 70 more countries than we were able to before. Ireland is sort of the structured finance capital world, and so that allows us – it really opens doors for our business globally. So that's the corporate trust, and our bankruptcy trustee business is doing very, very well there too. I think we just had our first $2 million quarter in that business in the first quarter. So very, very excited about that. And then Jim touched on our investor solutions business, which was a relatively mature business relying on the wirehouses and brokerage firms, and now we're seeing it grow again by providing the same services to the fintechs. And you can see in our desk there the four latest fintech companies that have signed up to do business with us. And then our wealth business, you know, well, so you asked about institutional, so I'll pause there and we can talk about that.

I would say the only thing to add on the institutional business is that, you know, as the rates have gone down, we've seen the 12B1 fees erode. And then as rates go back up, that business will continue to be additive as those come back. So we've been growing the traditional fee side. And then as rates go back up, we'll see 12B1 fees erode. So, Mariner hit all the highlights on that. I don't have anything else to add other than you can see additional – you'll look to see additional growth as rates improve. I always steal Jim's thunder. I'm used to it.

Got it. That's great, Tyler. Appreciate that and all the other details in the updated slide deck as well. Perhaps you're changing gears and just going back to the M&A discussion. Just curious, you know, with the stock still near all-time highs and, you know, obviously having, you know, a strong currency to affect transactions going forward, if you're feeling more or less optimistic on the acquisition front on a whole bank perspective, looking forward over the course of 2021 here.

I'm not sure I understand. You might ask that.

Do we feel optimistic? Optimistic about M&A?

Oh, yeah. I mean, you know, like I said, this is 90 days ago. You know, certainly I would say if you talk about just the industry backdrop, deals are getting done. So, you know, pricing seems to be getting some consistency and there seems to be some foundation being built for deals to get done. So, you know, we'd like to think so. We hope so. But, you know, again, we don't do ticker tape deals. We're not going to. dig deep into something that has some hair on it just to get something done. We're going to keep to our guidelines, keep within the rails of doing good quality, high-quality deals, and we just have to build relationships, see what happens.

Okay, great. I appreciate all the color. Thank you, guys. Thanks, Nate.

As we have no further questions, this concludes our question and answer session. I would now like to turn the conference back over to management for any closing remarks.

Yeah, the only thing I would add, this is Mariner, we didn't really get to talk about wealth management, but we're very excited about what's going on with our wealth management business. We had a very nice quarter. We talked mostly about institutional on the fee side, but our wealth business had a very strong first quarter with new business. And I did mention in our prepared comments that we've launched our family office business. We think we have a very unique offering. We've hired an excellent CIO for that business, comes to us from the private side, private investing side for Northern Trust, ran that for the institutional segment for Northern. And so we're very excited about our wealth offering. We have the right, you know, as an institution that's been around a really, really long time, trusted partner with institutional capital, and institutional backing. We're very excited about how that couples with our commercial business and the prospects of that going forward. So that's the only thing I would add. And other than that, we appreciate everybody's time.

Thank you. Thanks, Mariner, and thanks, everyone, for joining us today. As always, you can contact Investor Relations at 816-860-7106 We appreciate your interest and time, and have a great day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.