UMB Financial Corporation

Good morning, and thank you for attending today's UBM Financial second quarter 2022 conference call. My name is Donyell, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Kay Gregory, UMB Investor Relations. You may now proceed.

Good morning, and welcome to our second quarter call. Mariner Kemper, President and CEO, and Ram Shankar, CFO, will share a few comments about our results. Jim Rhine, CEO of UMB 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, which are subject to assumptions, risks, and uncertainties. These risks are included in our SEC filings and are summarized on slide 43 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. 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 everyone for joining us today. Our second quarter results included a 23% lean quarter annualized increase in average loans, solid net interest margin expansion, and continued momentum in our fee businesses. Income from bond trading activities and 12b-1 fees were strong, while we saw some market-related pressure in trust and security processing and in the valuation of our equity positions. Additional drivers are included in our slides, and Ron will share more details shortly. Net income for the quarter was $137.6 million, or $2.83 per share. Operating pre-tax, pre-provision income was $187.1 million, or $3.84 per share. Financials for the second quarter included a pre-tax gain of $66.2 million, from the sale of our Visa Class B ownership included in fee income. In conjunction with the gain, we made a one-time contribution of $5 million to our charitable foundation included in other expenses. Pipeline and sales activity continue to be strong across the company. In private wealth, we brought in nearly $750 million in new assets year-to-date on track to significantly outpace 2021 full-year sales of $836 million. Our institutional banking teams are continuing to perform well. Year-to-date, new business volume has increased 15% in corporate trusts and escrow services and 68% in specialty trusts. And public finance has closed 68 deals so far in 2022, compared to 52 for the same period last year. The team recently closed its largest bond issue to date, a $146 million general obligation bond. As you may have seen in June, we announced the agreement to acquire Old National Bancorp's HSA business. As healthcare services continues to focus on direct-to-employer space, this acquisition provides an extremely strong team, along with more than $400 million in deposits that will complement our organic growth efforts. Moving to lending, you'll see the drivers behind the growth this quarter on slide 24. Top-line loan production, as shown on slide 25, again was very strong. coming in at $1.3 billion for the quarter. Payoffs and paydowns moderated some and were 3.1% of loans. Given the opportunities we see across the footprint, we expect continued strong growth in the third quarter. We saw phenomenal growth in CNI, with balances increasing nearly 30% on a linked quarter annualized basis. While line utilization ticked up slightly in the second quarter, much of the growth is due to consistent sales efforts paying off in new customers, as well as our relationships with strong companies needing capital to continue to grow. Average residential mortgage balances have increased 27% over the second quarter of last year. As we've discussed previously, we don't rely heavily on mortgage gain on sale revenue. However, we continue to grow our own portfolio and have seen strong activity through our down payment assistance program of late. The program launched in December of 2021 and is geared towards underserved markets, and it had more than 500 new applications year-to-date. On the other side of the balance sheet, average total deposits for the quarter decreased 3% or 12.2% on an annualized basis compared to the first quarter, while average DDA balances increased slightly and comprised 45% of average deposits. While we've seen cycle-to-date beta on interest-bearing deposits of approximately 34%, I think this metric alone gives an incomplete view, as it ignores the benefit of DDA balances, which have zero beta, and the impact of borrowing levels, which have this 100% beta. I'd encourage you to look at our total cost of funds instead, which had a beta of 22% thus far. Additionally, we benefit on the earning asset side. with cycle-to-date betas of nearly 54% and a linked quarter beta of 61%. This compares favorably to others we've seen report so far. Our net interest margin expanded 25 basis points from prior quarter, driven by asset repricing and favorable mixed shift in earning assets. I'll note that the deposit pricing we're seeing is so far outperforming our internal expectations. We'll continue to manage these costs as we can while opportunistically funding organic loan growth. As you know, we have a larger commercial and institutional customer base relative to many peers. As such, we have some index deposits that tend to move more quickly with interest rate changes. But we look to the entire relationship and overall profitability of these relationships. For example, many public fund customers bring treasury management, lockbox, card programs, and bond issuances opportunities. And in addition to lending relationships, our commercial clients may also have corporate card or healthcare service products. Similarly, many of our institutional clients have asset servicing or suite product relationships in addition to the lending relationships. Moving to asset quality, our net charge-offs were elevated in the quarter, driven entirely by a $27.7 million write-down related to one single commercial credit. While this quarter's charge-offs were elevated, We expect that our full-year loss rate will be consistent with our long-term historical averages of approximately 30 basis points or less. Non-performing loans declined 84% from the prior quarter to 10 basis points of total loans as the overall portfolio continues to perform well. Our reserve coverage ratio is now 0.87% of total loans in line with post-CISL day one implementation levels. I'll close by thanking our associates across the country for their hard work and dedication to our customers and communities. I'm excited to execute on the opportunities we see in the second half of the year and beyond. Now I'll turn it over to Ram for some additional comments. Ram?

Thank you, Mariner. Our strong loan growth coupled with the benefits of higher short-term and long-term interest rates drove a 6.9% link order increase in net interest income. We amortized $1.6 million of PPP origination fees into income, and the overall PPP contribution to second quarter net interest income was $1.7 million compared to $2 million last quarter and $12.4 million in the second quarter of 2021. At quarter end, our PPP balances stood at $26.4 million, down from $77.2 million on March 31st. Approximately $400,000 in unamortized fees remained. As shown on slide 21, our Fed account, reverse repo, and cash balances declined to $3.7 billion and now comprised 10.5% of average earning assets with a blended yield of 83 basis points compared to 30 basis points in the first quarter. The 3% decrease in average deposits from the first quarter was driven by outflows of commercial deposits, including the typical seasonal trends in public funds along with capital markets and corporate trust deposits. The total cost of deposits, including DDAs, was 20 basis points, up from 8 basis points last quarter, and the cycle to date beta is approximately 18%. Net interest spread and net interest margin expanded from the first quarter by 13 basis points and 25 basis points, respectively. Net interest margin benefited 21 basis points from reviews, liquidity balances, and rate, 16 basis points from loan repricing, and 11 basis points from the benefit of free punts, offset by a negative 26 basis points related to the cost of interest-bearing liabilities. The estimated impact of net interest income at various rate scenarios is shown on slide 30. In a rate ramp scenario of plus 200 basis points on a static balance sheet, net interest income is predicted to rise 3.1% in year one and 12.8% in year two. This is predicated on repricing of our variable rate loans based on underlying changes to LIBOR, SOFR, and other indices, as well as deposit betas and mix shifts consistent with the prior cycle. While it's early days, our second quarter beta experience was in line to slightly better than our model assumptions. As Mariner noted, while the focus on deposit betas is important, we focused primarily on net interest spread management, given that our future funding needs will depend on our continued efforts to fund our organic loan growth engine. As we've done in prior cycles, using cash flows from our high-quality securities portfolio is another lever available to us to fund the loan growth opportunities. Our average loan-to-deposit ratio remains attractive at 58% below our past highs in the low 70s. Loan yields increased 23 basis points from the first quarter to 3.72%. 58% or about $10.6 billion of average loans are variable rate, with 57% repricing in the next quarter and 64% repricing within the next 12 months. As I noted, these are largely tied to indices at the short end of the curve. Additionally, the securities portfolio is expected to generate $1.2 billion of cash flow in the next 12 months. The yield on those securities rolling off is approximately 1.84%, while purchases this past quarter were made at an average of 2.96%. Those details are shown on slide 28. We continue to reclassify securities to the health and maturity portfolio during the second quarter to help manage tangible capital and reduce the impact of rising rates on our equity. Average HTM balances for the second quarter, excluding the $1.1 billion of revenue bonds that we've long held in that book, were $4.1 billion. The composition of our HDM portfolio is shown on slide 28. Our regulatory capital ratios remain strong, with the total risk-based capital at 13%, CET1 at 11.44%, and leverage at 8.17%, respectively. Back to the income statement, total fee income for the quarter, as shown on slide 22, was $176.3 million, including the gain on the sale of our Visa Class B shares. Fee income compared to the first quarter was impacted by the $66.2 million gain on that sale, as well as other market-related valuations, including a reduction of $10.5 million in company-owned life insurance income and a $4.9 million negative change in the security gain or loss line related to other equity positions and a $4.2 million reduction in derivative income from back-to-back swaps. Additionally, the first quarter of 2022 included a $2.4 million gain on the sale of our factoring business, as well as $3 million of healthcare services conversion fees. Excluding those variances, second quarter fee income compared favorably to the first quarter levels. One of the biggest drivers of the fee income momentum in the second quarter was the $9 million quarter-over-quarter increase in brokerage fees, where 12B1 and money market revenue share fees are included in our income statement. The decline in equity valuations had a modest impact on fees tied to AUA and AUM levels in the trust and securities processing line. Non-interest expense trends are shown on slide 23. The link quarter decrease was driven primarily by a $10.7 million reduction in deferred compensation expense related to the reduced COLI income I mentioned, along with lower payroll taxes, insurance, and 401k costs. Offsetting these reductions were the charitable contribution we made during the quarter, $4.4 million in additional legal expenses related to general corporate activities, and $4.5 million of increased incentive costs for company performance. Our effective tax rate was 20.8% for the second quarter and reflected a smaller proportion of income from tax-exempt municipal securities. For the full year 2022, we anticipate that the tax rate will be between 19% and 21%. 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.

If you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, please press star 1. As a reminder, if you are using a speaker phone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. First question comes from Jared Shaw of Wells Fargo.

Hi, good morning. This is Timor Brazile filling in for Jared. Good morning. Starting off on the deposit side, you know, just as you're thinking about funding this continued strong loan growth, clearly you have plenty of on-balance sheet liquidity with a 60% loan to deposit ratio. You have 400 million of deposits coming on later this year from the O&B deal. I guess, how are you thinking about kind of funding the loan growth over the next couple of quarters? How aggressive will you be in chasing new kind of deposit relationships in term here?

If you want to thank Ms. Mariner, I'll take that. If Ram or Jim, anybody else has anything to add, they can jump in. But I think it's important to Sort of pay attention to what our balance sheet looks like and has looked like for a long time. You know, the first quarter we always have our seasonal deposits runoff. And if you take the runoff you saw through the first half of the year here, really it comes down to about a half a billion, 500 million that would be indicative of what's happened to the whole industry as opposed to the whole that you've seen because the rest of it would have been kind of that typical seasonality of our deposits. So I would focus on it being about a half a billion that went off. And I think a couple things I'd note about that. One, you've seen utilization rates go up. Borrowers are, you know, chewed through their cash and are starting to borrow. Energy costs and inventory costs, you know, costs are up in general. So I think it's indicative of customers really using their cash as opposed to money leaving our balance sheet. It's how I really describe more what has taken place with our deposits. In addition to that, we've talked many times in the past about the $14-plus billion we manage for customers off balance sheet, and we can bring any of that on at any time and pay competitive rates we've demonstrated that we can manage spread and margin expansion while also paying market competitive rates. So the complexity of our customer base, institutional, commercial, large corporate, really allows us a lot of flexibility to bring deposits on and off our balance sheet and flex our balance sheet when we need to. So really not worry about it at all, and we've seen this before.

Okay, thanks for that. And I'm just wondering, in terms of the higher interest-bearing deposit costs, how much of that was due to the mix shift with maybe some of the lower cost deposits exiting to other vehicles versus, you know, either customers calling in and asking for higher rates or just posting higher rates across the board?

I would say, you know, we talked about this before, about 29% are hard index of our total. So that obviously moves immediately with rate changes. The rest of it, we're able to manage, you know, obviously 45% of our deposits are non-interest bearing. So, you know, I kind of maybe switched the story on you a little bit and focused some more on what we focus on. You know, if you think about the whole balance sheet instead of just deposits, you know, we're only up 12 basis points on total on the liability side, and we're up 39 basis points on the asset side. We were able to, you know, we're able to demonstrate, as we always are, spread expansion of 13 basis points and margin expansion of 25. And then you think about net income ultimately being the ultimate driver. So you think about spread and margin being up along with NII being up 7%. That's what we focus on. So we're focused on being able to manage the expansion of margin spread and ultimately manage the increase of net interest income, which ultimately results in a bigger bottom line.

Okay, and then switching gears to asset quality, any additional color you can provide on that $27.7 million charge off, maybe what industry it was in, what's the remaining balance on that credit, and how much you had previously reserved against it?

Yeah, I'd say there's going to be limited comments here because the credit happens to be in bankruptcy. We talked about this credit in the first quarter. I identified it and mentioned on our call in the first quarter that we thought we might be able to resolve it positively. As the bankruptcy procedures progressed into the second quarter, we realized through complexities and changes that that wasn't going to be the case anymore. And we ultimately made a decision to take the charge. There's nothing, what I would say, There's nothing that you could comment about it that would relate to any industry issues, vertical issues, underwriting issues per se. And so it doesn't really – there's no trending 2.2 here. And as we've said before, you know, it's a one-off. We have a long history of sort of demonstrating that we have a one-off situation now and then. You know, if you look at page 27, you'll see the history – in our deck. You look at 27, it sort of tells a story. Sitting here with Tom Terry, our chief credit officer, Jim Ryan, our CEO, and myself, three of us have been running credit and on credit committee for more than two decades together. And this is nothing new and nothing different. We expect to return in the back half of the year to our historic levels of 27 to 30 basis points of charge off on an annualized basis, which is in line with our 15-year history. So that's pretty much what I would say. Oh, and yeah, I'd also add prospectively in the data, you'll see that our MPLs have gone back down to 10 basis points, which I think is, from all the reports, I've seen the lowest prospective number of our peer group for MPLs.

Yeah, that's perfect corollary to my last question, I guess. That link order decline and not performing assets, I mean, what drove that? Was that return to payment? Was that just kind of re-looking at the underlying credits and moving them back to performing status? I mean, that was a pretty exceptional move there. What drove it?

Largely, again, because of how we operate, it had jumped because of this credit, and now it's declined back down to its normal levels, largely.

Okay, thank you. Thanks, Timur.

Thank you. The next question comes from Nathan Race of Piper Sandler. Please proceed. Yep.

Hi, everyone. Rob, perhaps I have a question on you if we kind of add back the COLE impact within salaries in terms of the overall operating expense run rate going forward. Any thoughts just kind of directionally in terms of kind of how the total run rate trends in the back half of 2022?

Yeah, I would say I would use the $214 that we reported this quarter. And as we noted, $10 million of deferred comp expense was a credit to expense this quarter. So if you add $10 million, it's $224. And then take five away from the Charitable Foundation, so we'll get to $219. I would say off the four and a half million of legal expense increase, some of it was tied to some extraneous factors that we don't expect to recur. So, you know, we're talking about a run rate of, you know, 217 to 218 plus or minus for operating expenses.

Okay, perfect. And then just going back to the charge off in the quarter, was the loan that was charged off here in 2Q, was that the same one that you guys flagged last quarter in terms of expecting some favorable occurrence on?

Yes, and I was just mentioning a moment ago, as the bankruptcy procedures progressed from first quarter to second quarter, the situation just changed and evolved.

Understood. And then just in terms of, it sounds like pipelines are in good shape and you guys are still expecting above average loan growth going forward. And with the reserve now down to the Cecil day one level, how do you guys kind of think about the need to provide for growth and just the overall macro uncertainty that exists today? Assuming charge-offs, you know, go back to that 27 to 30 basis point range that you talked to earlier.

Yeah, you know, so yes, first answer, we do expect loan growth to continue at favorable levels as they've been. And as it relates to how we reserve against it, as you know, we've talked about this, since CECL, the algorithm is a lot more complex than it used to be. You know, we have to rely on Moody's for, you know, as we look forward into this unemployment data, if that evolves and we go into recession, you know, there's a lot of unknowns about how all of us will have to factor in the economic data factors and how we, you know, how we build that into our algorithm. So there's some unknowns there about how that, I would suggest from my vantage point, we're staring at at least marginally unfavorable economic data, which from an algorithm standpoint, that will drive us to preserve a little. Loan growth should drive us to reserve. And the thing that works against it related to the algorithm is if our data continues to get better and bad data rolls off in exchange for good data on our portfolio, that pushes against us reserving. So it's, it's the, it's the connection and the relationship between the two of those. Uh, but I, I would suggest that you, we would probably marginally see us reserving, um, a little bit against the economic conditions and, and the loan growth that, that, that we, uh, we see. And, um, it would be the prudent and right thing to do anyway. And, uh, you know, how that plays off against 87 basis points. I mean, our preference would be not to see it go down as a ratio. But, you know, we've got an algorithm that we have to live with. And so I hope that's helpful. And I don't know if Rahm's here to add anything.

Got it. Yeah. Super helpful. And if I could just ask one more, just going back to the balance sheet discussion from the earlier question. I just want to make sure I understand kind of the expectations for deposit levels and the earning asset base going forward. It sounds like, you know, you're expecting some additional outflows maybe in 3Q, and then you have the HSA deposits coming out in 4Q. So just overall, Ron, perhaps, how should we kind of be thinking about the earning asset base going forward with those deposit dynamics at play?

Yeah, I don't think we expect to see further outflows in the third quarter necessarily. I would say stable to maybe grow a little bit based on our ability to bring on, as I talked about earlier, we can bring on as much of the $14 billion we have off balance sheet by paying competitive rates. I don't see us going backwards, more of a stabilizing approach for the rest of the year, and then having the HSA deposits coming on. Yeah, and then, you know, again, remember, we can rotate investments into loans too, right? So we have a $13 billion investment portfolio, 58% loan to deposit ratio. So we've got that also working for us.

That'll be some real-time thinking on the portfolio side, Nate, in terms of just whether we reinvest our cash flows from our securities portfolio every month. We talk about it at our Asset Liability Committee. Sometimes we choose to reinvest. Sometimes, you know, depending on what the deposit is, outlook looks and loan growth outlook looks, we might decide not to reinvest.

Okay. Understood. I appreciate all the call and you guys taking the questions.

Thanks, Nate.

Thank you. Just a general reminder, it is star 1 on your telephone keypad to ask a question. The next question comes from Chris McGrady of KBW. Please proceed.

Hi, good morning. This is Nick Mutafakis for Chris McGrady at KBW. I wanted to start, could you guys just remind me what the monthly cash flow runoff is for your bond book?

Yeah, on page 28 you'll see the portfolio statistics, Nick, and for the next 12 months we expect about $1.2 billion to come from our portfolio.

Okay, that's great. And then just on the cash level, obviously you guys kind of reduce cash. You're down to about 10% of average earning assets. Can we look at this as kind of the floor for the cash levels, or could we potentially run that down even further to fund future loan growth?

As you look at the bottom of slide page 21, we show the pre-pandemic levels, right? So if you look at the interest-bearing deposits, it's slightly higher than where we were pre-pandemic, so we could expect some additional contraction in those balances. But Obviously, as you see on a quarter over quarter basis, you know, in response to what happened on the deposit side of the equation, we did see some normalization of these balances.

Oh, sure. Okay. That's helpful. And then, you know, maybe just on the loan growth side, as you look into the back half of 2022, is there any portfolios where we could see some upside surprise and and also potential slowdowns as far as different categories?

Well, I think, I mean, from a growth standpoint, we give you a picture into the upcoming quarter as we always do. So third quarter looks strong as it has. I would say it seems to be coming across the board from all categories and all regions. You know, we don't really get too far beyond one quarter look as far as guidance goes. But just the indicators for growth seem to be good as you look into the whole back half of the year. And as far as upside or downside, you know, we're all kind of dealing with the same facts there as it relates to we've got the Fed decision today, you know, what happens with the labor markets, what happens with, you know, the back half of this year. I think, as I said, I think last quarter, you know, Companies are doing pretty well. They're sort of sold out from last year on into through this year. So I think the impact of a recession is really a 23 impact. So loan growth feels pretty good for the remainder of this year.

This is Jim Ryan. One of the things that could be a downside surprise for banks would be the increase in rates. And at what point do people decide not to take on the next project? Or will backlog be canceled or is already booked? But that isn't happening yet. and we're staying in close contact with our clients, and they're already baking those increases into their projections. If payoffs slow, that could also be another factor. Yeah, it's a benefit, right?

We've seen from first quarter to second quarter, we've already seen that moderate because of higher rates. So we went from mid-4s to 3.1 on payoffs and paydowns. You also have utilization rates up marginally, and I think both of those things, will buoy based on the current book. Also, about 60% of our new business in the second quarter was from new customers. So that also, we should see buoy things for the back half of the year. We talked to construction companies about their backlogs. Jim talks about that. They'll all say they're still very strong. And the only thing they see The developers, there's a bit of a softening in the forward-looking pipeline for developers, but that's being made up for larger projects, public-private and kind of large data farms and distribution facilities and multifamily and areas where there's still a lot of need, kind of making up for logistics and things like that are making up for some of that more expensive borrowing and land costs.

Great. That was a great color. And thank you for taking my questions.

Let's not forget also that rates are still at historically low levels, right? You know, talking heads talk about all the crazy stuff going on with rates. We're still at historically low levels. So I think fair saying.

Thank you. The next question comes from John Rodas of Janie.

Please proceed. Good morning, everybody.

Hey, morning, John. Okay. Ram, on the margin, you know, obviously nice expansion. Can you talk about maybe just give a little more detail? Do you have what the margin was maybe in June and how we should think about the margin going forward?

I don't think we get specific. Just because of deposit inflows and outflows, it's hard to just use any month data. But I would say, obviously, with the 25 basis points that we got in the second quarter, that was probably a little faster than probably for the industry and for us as well. But we continue to expect modest margin expansion going forward based on where we see loan pricing. We're going to be fairly disciplined on the deposit side and managing that. As you heard Mariner talk about, we're going to manage to net interest spread and make sure that, you know, that translates to margins being maintained or expanding from here, but at a more moderate pace than the second quarter.

Okay, makes sense. And, Ron, just one more question on the brokerage fees. I mean, I get the higher rates and the 12B1 fees, but I guess I was a bit surprised to see the jump from the first to the second quarter. And if we could, I think, you know, in prior quarters, you've talked about looking back to 2019, I think, when where brokerage fees were. And for that, for the whole year, they were 31 million. Can you just talk about what was in that number this quarter? And then moving forward, you know, what do you see in the brokerage line item to the extent you can?

Yeah, I think it was a pleasant surprise for all of us, obviously, with the Fed raising rates by 75 basis points and the back end of these investments being really short term in nature and where the treasury curve is. It was a nice surprise for us. So what we said relative to the $31 million back in 2019 was that book of off-balance sheet deposits where we get revenue share and 12B1 fees has doubled. So clearly, you know, we see some opportunities as interest rates stay elevated to be able to mimic the $12, $12.5 million run rate you saw in the second quarter.

And it ultimately happened quicker from alluded to it because the short end came up. And so the yield curve has made a big difference in how quickly that happened and how quickly money markets were able to invest and make money on the shorter end of the yield curve, which allowed them to share with us sooner.

So, Ron Mariner, just to clarify, though, again, so it should stay at this level if we get no further rate increases or even with further rate increases, just given where the forward curve is, I guess?

Yeah, I guess. It could marginally increase depending on what happens with our off-balance sheet deposits, right? You heard Mariner answer about, you know, deposit question about, you know, we can actually tap some of these off-balance sheet deposits so balances go down. On the other hand, if our aviation and corporate trust businesses pick up faster than we expect, we could see more deposits being added in the off-balance sheet category and we can see more volume-driven increases to this line item. But I think... Just like my question about margin, I think any ongoing increases will be modest compared to second quarter levels.

Yeah, there's the size of the off-balance sheet book, and then there's the rate paid, right? So on the rate paid side, that's going to moderate. Though I think there's room. It kind of depends on what happens at the short end that you occur. So it's likely to moderate, but I think there is some increase still in there with rates still rising. And then it just ties to the size of the book. I expect, we expect it to continue to grow. You know, a lot of that has to do with what's happening with municipal underwriting on a national basis. It has to do with what happens with aviation, you know, planes being bobsled, moved, things like that. And so I, again, also sort of expect that to grow a bit.

Makes sense. Thanks for the added color, guys. Thank you.

Thanks, Jeff.

There are currently no further questions registered at this time, so I will pass the conference back over to the management team for closing remarks.

Thank you, and thanks for joining us today and for your interest in UMB. As always, if you have follow-up questions, you can reach us at 816-860-7106. Thank you.

That concludes the conference call. Thank you for your participation. You may now disconnect.