United Community Banks, Inc.
Q4 2020 Earnings Call Transcript

Published: 20 Jan 2021

[Operator:]

Good morning, and welcome to United Community Bank's Fourth Quarter 2020 Earnings Call. Hosting the call today are Chairman and Chief Executive Officer, Lynn Harton; Chief Financial Officer, Jefferson Harralson; Chief Banking Officer, Rich Bradshaw; and Chief Risk Officer, Rob Edwards. United's presentation today includes references to operating earnings, pre-tax, pre-credit earnings and other non-GAAP financial information. For these non-GAAP financial measures, United has provided a reconciliation to the corresponding GAAP financial measure in the financial highlights section of the earnings release as well as at the end of the investor presentation.

[Lynn Harton:]

Good morning, and thank you all for joining our call. Results this quarter were driven both by strong underlying business performance and a very successful start to PPP forgiveness. EPS came in at $0.66 on a GAAP basis and $0.68 on an operating basis, both representing solid improvements over both last quarter and last year. Our return on assets of 1.3% drove a return on common equity of 12.4%. On an operating basis, our return on assets was 1.34%, and we reached 16.3% in our return on tangible common equity. These numbers include a discretionary $8.5 million contribution to the United Community Bank Foundation. Excluding this, our operating ROA was 1.49% and our earnings per share was $0.75. For some time, I wanted to take a more strategic approach to our charitable giving, and in doing so, make an even greater positive impact in our communities. Having the one-time gain from PPP fees seemed like the perfect opportunity to launch that initiative. I believe this will be a win-win for all of our constituents. It certainly will be good for our communities as we focus on improving the vitality of our markets. Our employees are excited about having support from the foundation for the local charitable events and boards that they have served on for many years. It will also enhance our brand as the bank that service built and continue to differentiate us in our markets from the banks we compete with. Our teams continued to deliver strong loan and deposit growth with 8% core loan growth and 13% annualized core transaction deposit growth. We are continuing to drive down deposit cost, which fell to 17 basis points this quarter, down 8 basis points from last quarter. The low rate environment has pressured the margin, which without PPP fees, would have declined about 10 basis points.

[Rob Edwards:]

Thank you, Lynn. I will start my comments on Page 7. We were pleased with our loan growth in the quarter. Excluding PPP loans, we had $243 million in loan growth, which translates into 8% annualized growth in the quarter. Growth was well distributed across different portfolios from residential to equipment finance to commercial to real estate. We were also pleased with the progress we made in helping our PPP borrowers achieve forgiveness, with just over half of our PPP loans being forgiven in Q4. On Page 8, we also feel good about our credit quality, given the stress in the economy and the high degree of uncertainty, our net charge-offs were very low in the quarter at just 5 basis points with the benefit of strong recoveries again this quarter. Navitas net charge-offs were also relatively low in the fourth quarter at 75 basis points, which is the best number that unit has reported since the third quarter of 2019. Our loan loss provision was $2.9 million this quarter and totaled $80.4 million for the full-year, as we significantly built the reserve as the economic forecast deteriorated with the pandemic. On Page 9, we give you some more detail on credit. Loan deferrals were $1.85 billion at June 30 as we took care of our customers at the start of the pandemic. But as the pandemic continued, the impact of the stress became more clearly identified in specific sub-portfolios. So deferrals have come all the way down to $71 million at year-end. But as you would expect, we did downgrade some loans which drove increases in our criticized and classified loans, about $207 million that mostly came from our hotel and senior care portfolios. I will remind you that both our hotel and senior care books have significant equity. The average occupancy of the hotel portfolio is 51% and is being pulled down by the urban-limited service subcategory which carries a 42% occupancy. We provide greater detail on both portfolios in the appendix. Our NPAs increased $12 million and stand at 55 basis points of total loans. All said, we feel good about where we are on credit and where our reserve is.

[Jefferson Harralson:]

Thank you, Rob. I'm going to start my comments on Page 11 and talk about capital. Our capital ratios were relatively flat in the quarter and remained significantly above peer levels. We expect to use capital in 2021 and are starting with two relatively small redemptions of a sub debt and a trust preferred in the first quarter. We are optimistic we can put some capital to work via M&A and if that does not happen, you should expect to see some more redemptions of this type and for us to consider using our $50 million repurchase authorization this year. On Page 13, you can see our net interest income and net interest margin. Our margin was impacted by significant PPP forgiveness in the quarter and the impact of loan accretion was stable. Excluding these two items, our core margin was down 10 basis points. About 6 basis points of the 10 basis points of core margin pressure came from increased liquidity in the quarter. This increased liquidity was driven by the $671 million of PPP forgiveness and our 17% annualized or $629 million and deposit growth in the quarter. More importantly, we were able to grow core net interest income by 8% annualized in a quarter despite the environmental headwinds due to our strong underlying loan growth and strong underlying deposit growth. Moving to Page 13, it shows the details of the strong deposit growth I mentioned in the quarter. Deposit growth was strong all year with the total deposits up 23% year-over-year, excluding the Seaside deal. This quarter's growth was benefited by our usual and expected increases in public funds. But excluding public funds, core transaction accounts were still up 13% annualized. We were also pleased that we made good progress on our cost of deposits moving down to 17 basis points from 25 basis points last quarter. Page 14, we had a very strong quarter in noninterest income, albeit down from last quarter's record result. The main driver of the decrease from last quarter was mortgage, down $6.1 million. We record mortgage revenue at the time of rate lock and rate locks were down 11% in Q4 versus Q3. Also, the gain on sale percentage declined in the quarter, requiring a write-down in the pipeline.

[Lynn Harton:]

Thank you, Jefferson. I know all of our United team is proud to have ended the year with a strong quarter. As we know, it's been a year field with challenges that never would have been expected 12 months ago. In spite of those challenges, we produced record levels of pre-tax pre-provision income and grew pretax pre-provision income by 15% in 2020. We had record organic loan growth in dollar terms. We had record organic deposit growth in 2020 with $2.5 billion in growth, up 23%. We also had record mortgage production, which nearly doubled in 2020 to $2.1 billion. Our teams created United's own portal and processing system for PPP origination and forgiveness, and our bankers literally worked around the clock to deliver that much needed product to our customers. We welcome the new bank, Seaside to the United team, and we're now established in great markets in Florida. Thanks to them. We enhanced our executive team with the addition of our new General Counsel, Melinda Davis Lux, we enhanced our Board with the addition of Jim Clements, President of Clemson University.

[Operator:]

Thank you. Our first question comes from the line of Brad Milsaps with Piper Sandler. Your line is now open.

[Brad Milsaps:]

Hey good morning, guys.

[Lynn Harton:]

Good morning, Brad.

[Brad Milsaps:]

Jefferson, maybe I wanted to start with the balance sheet. Obviously, you guys have had tremendous deposit growth this year. Trying to figure out ways to put all liquidity work continued to be a challenge in the past. I think you've talked about mid single-digit type loan growth in 2021. I wanted to see if that number kind of still held true. And just kind of what your plans were kind of in the face of all liquidity whether it'd be additional bonds? Obviously, you've got some small amount of debt out there, but probably not enough to absorb kind of everything you're looking at this point. Just any additional color there as relates to loan growth and kind of how that impacts the NIM?

[Jefferson Harralson:]

Yes. So, I'm going to pitch it to Rich to start of the loan growth, and I'll take that and weave intothe story for the balance sheet.

[Rich Bradshaw:]

Thank you, and good morning, Brad. Yes, we're expecting mid single-digit growth in Q1 in 2021. The pipeline and activity are just very strong right now and we don't see that changing. And again, with our new hires, we're feeling very good, and I think there's a great opportunity ahead for us.

[Jefferson Harralson:]

And with that base of loan growth, you're going to see some of the same things you've been seeing already. First of all, we expect another $600 million in from PPP forgiveness, so more cash in. So we probably become slightly more liquid again for one more quarter. We are expecting the balance sheet to stay relatively flat to higher. We expect these deposits that have come in to stay. Now there is a standard deviation of outcomes around that. You may see deposits come in a little bit as you get forgiveness. But we think the deposits are most likely going to be sticky or grow a little bit. We have about $1.1 billion of cash, again with more cash coming in. We're going to first use it for loan growth, and you're going to see securities growth from here.

[Brad Milsaps:]

Great. That's helpful. And maybe just kind of one follow-up maybe for Rich. We've got around two of PPP coming or it's here, I suppose. I mean, would you guys expect to sort of participate kind of at the same level you did in round one, obviously, adjusted for the size of the program? Or do you expect that you could further increase share there given all the success you had during the first round?

[Rich Bradshaw:]

Sure. And you are correct, we're living the PPP dream again. It officially opened up for banks our size yesterday and our portal was open. To give you a feel, we had almost 1,900 applications come through for about $230 million, it gives you an average loan size of about $120,000, which is similar to we experienced the first time. I would say the demand is a little smaller than the last time around. Part of that's driven by the requirements of the program and that they have to have a 25% reduction quarter-over-quarter. Remember the max loan size this time is $2 million versus $10 million. So there are some changes. So we're anticipating. I'm going to call it $400 million to $450 million to be the total demand. And right now, it feels like we're in the right position. Remember, it's called the second draw program on purpose. So that it's primarily geared at existing PPP customers. And so the ones that come through our portal are -- it's quite truthfully very easy for us to process. And this time around, there's very little to do on loans less than $150,000.

[Brad Milsaps:]

All right. Thanks for all the color.

[Rich Bradshaw:]

Yes. Sure.

[Operator:]

Thank you. Our next question comes from the line of Michael Rose with Raymond James. Your line is now open.

[Michael Rose:]

Hey, good morning, guys. Sorry if I missed this, but I understand the core margin was down about 10 basis points. Looks like there's some puts and takes. You'll be redeeming some debt mix shift to loan growth, maybe some net securities purchases. Are we near a bottom in the core margin? And could we actually see it expand as we move through the year just based on some of the stuff that you laid out?

[Jefferson Harralson:]

Yes. That's yes. Thanks for the question. So yes, I think we are. In the first quarter, I will call it, flat to down 5% in the core margin then I would expect it higher throughout the year. Now, this is because of the mix changes, is not including really anything with PPP2. So, think of this as sort of a forecast or my thoughts ex-PPP.

[Michael Rose:]

Correct. And then can you just give us an update on the lending hires? I think you've hired 40 revenue producers over the past two years or so. What are you -- what's your appetite as we move into this year? It does seem like there's some opportunities and some dislocations in some of your markets? And then how much of that kind of mid single-digit loan growth is actually coming from new originations versus kind of migration of books of business from some of those lenders you brought on? Thanks.

[Rich Bradshaw:]

Sure. Michael, this is Rich, again. Great question. So in January, we have hired 10 commercial people, one private banker in there to give you a feel of those 10, six are in Florida. So we're taking advantage of our new platform in Florida and the metro markets that we're in. I will tell you there are a lot of good conversations going on. Some team lift out opportunities. I'll also tell you that bonuses have to be paid right now. So I would expect a very strong February in terms of our hiring, and I feel very good about those conversations, particularly in Florida right now, it feels like Atlanta a year ago, particularly with Truist, JPMorgan, BMO Harris, there's just a lot of good opportunities for us, and we're moving forward with that. The last question you put in there to give you a feel. In March of last year, we hired a team from Truist in Central Atlanta. They started a week before effectively COVID hit. So for the first three months, they were doing PPP and -- but what I'm really proud to tell you is that team did $65 million in commercial commitments last year, most of which were full funders. So, we feel really good, and we're feeling good about the teams we're talking to as far as the opportunity.

[Michael Rose:]

That's very helpful. Maybe just one more for me, just more of a strategic question. You guys did the Seaside deal. You have a presence in Florida now. What you need to do there to really get scale? I know the footprint there is relatively small. Is it just hiring teams? Is it M&A as well? And then has there been any change in sort of the types of deals that you guys would look at? I think you've historically done and talked about kind of down to $500 million, but up to kind of $2 billion or $3 billion in size? Thanks.

[Lynn Harton:]

Yes. So, great question. First, relative to Florida, there's nothing we need to do per se. I mean, keep in mind, it's a private bank, commercial bank, so bringing these teams on is very consistent with what we've done. We're going to be able to continue to do that. We are adding two retail locations to the Florida franchise that we're excited about. With that said, we would be very interested in doing additional M&A in Florida as well as our other markets. We've got conversations going on around our footprint, and we feel good about the opportunity that we'll see there. So in terms of the sizes, your range is correct, given kind of what we see as the opportunity, we're probably more focused on the larger end of that range today than the smaller end. But we're looking at anything in that size range in our markets with good teams and a culture that fits. And we think we'll be able to have some good things to happen this year.

[Michael Rose:]

Great. I appreciate all the color. Thanks.

[Operator:]

Thank you. Our next question comes from the line of Jennifer Demba with Truist Securities. Your line is now open.

[Jennifer Demba:]

Lynn, could you just talk about what you're seeing in terms of incoming interest and deal activity right now? You seem pretty optimistic maybe something can happen this year.

[Lynn Harton:]

Yes. Well, I mean, I think everybody is looking at the same things we are. And in terms of margin, I think what we're seeing is a lot of banks that don't have a diversified business mix are going to struggle more. I mean, we've benefited from having Navitas, having mortgage operation, having multiple levers to pull, SBA, et cetera. And I think if you're a smaller institution, you're a great company, but you may not have those levers. I think they're thinking more seriously about who they're going to partner with. And I think culture and business model is playing more into that than raw price, I think is what we're seeing. So I do think there's going to be some good opportunities this year.

[Operator:]

Thank you. Our next question comes from the line of Kevin Fitzsimmons with D.A. Davidson. Your line is now open.

[Kevin Fitzsimmons:]

Just on the subject of the increase we saw in criticized classifieds. It -- we've kind of known at some point, we were going to see this where deferrals have come down meaningfully, but now we're seeing loans getting downgraded. How would -- should we expect in the next few quarters, do you view this quarter as more of a onetime, like pent-up catch up and downgrading those credits? Or would you expect a similar kind of pace of downgrades and increases to classifieds?

[Rob Edwards:]

Kevin, this is Rob. Thanks for the question. Really, two comments on how I'm thinking about it. Obviously, the biggest driver in the space that we have here is the pandemic, right. So, the downgrades were almost entirely hotel and lease-up or fill up infill senior care properties. So if the pandemic sort of subsides dramatically by the end of the second quarter and things begin to return to something closer to what they were pre-pandemic, I think this reverse -- this trend reverses pretty quickly. If the pandemic persists, I think you -- there may be more. I can also tell you, sort of leading into the second point maybe is we have our lowest pass risk rate increased by about $180 million in Q3. And obviously, a lot of that went into criticized and classified during Q4, that lowest pass-grade in Q4 declined by $50 million. So if the pandemic persists, I don't see a continued increase at the same rate, but I could see us have some additional credits move into criticized and classified. I will mention, though, and maybe it just goes back to how you feel about the pandemic, but typically, when you're building criticized and classified loans, you have maybe a flawed product or a flawed management team or a flawed business model. And in this case, I don't feel like we have any of that. We've got strong management teams, strong borrowers, strong products, appropriately structured. It really is an impact of or a result of the impact of the pandemic.

[Lynn Harton:]

And Rob, maybe talk about the primary driver or criteria. What puts something in the criticized category, which is really, really -- the increase is really more in the criticized category versus the cost?

[Rob Edwards:]

That's right. Yes, that's right. So if we have a credit that can't make amortizing P&I payments based off of current operations then it gets downgraded to either criticized or classified. So, they've got to be able to make both the principal and interest payments on the amortizing debt.

[Kevin Fitzsimmons:]

Okay. Great, Rob. I appreciate that. And Jefferson, just one quick follow-on on expenses, I appreciate the outlook. Just curious if there are any specific initiatives that are embedded within that outlook beyond deal-related cost saves that you expect to continue, I would think.

[Rob Edwards:]

Well, you mentioned the biggest one that you'll see is the $2 million a quarter as we start getting Seaside cost savings as that conversion is happening later this quarter. We had you'll see the follow-through on the six branch closures that we had in December will translate into some cost savings. That PTO piece of it, we don't think is going to recur so some of that most likely comes back. And then from the other kind of the other pieces of cost savings or just a lot of little things. We're trying to automate pieces of consumer lending, but it's -- there's nothing that's named. There's nothing that we're that's a big -- one big major project that's going to cut a bunch of dollars, but there's a lot of little ones that you think that are ongoing that we think can help.

[Operator:]

Thank you. Our next question comes from the line of Catherine Mealor with KBW. Your line is now open.

[Catherine Mealor:]

Just wanted to follow up on some of the commentary, Jefferson, you made on the margin and thinking about both loan yields and deposit costs, and my first question is. Can you give us a sense as to where new loan yields are coming on for your new production versus where the portfolios its today? And then also on the deposit side, I mean, your deposit costs are so low at 17 basis points. How much further room do you think you have there?

[Jefferson Harralson:]

All right. And, I guess, the loan yield piece is my biggest worry for next year is, right now, you're seeing the loan yields come in at relatively similar to where they're going off. But we're sitting on a lot of cash. A lot of banks are sitting on a lot of cash. Loan growth is necessary to eat into that cash. And so I'm concerned that you're going to see increased price competition as we get into next year. And I don't know if Rich, you have comments on pricing?

[Rich Bradshaw:]

I would say, we've seen a little of that, but not a great amount, right. And so, we're -- I'm not concerned about it at this point.

[Jefferson Harralson:]

So that's great. So you have that there. On the deposit pricing, we were down at 12 basis points in the Q3 of 2015 that was our low mark. And that is our target, our interim target now. So if rates stay here, that's my target to try to get that down to 12 basis points.

[Catherine Mealor:]

Okay. That's great. Now on the securities yields, where are new securities deals coming on that $600 million you're investing per quarter?

[Jefferson Harralson:]

Right, so this quarter, they came on at about 110 basis points. Now the 110 basis points might be a little lower than you're expecting because some of the investing we're doing, I would call it, alternative liquidity investing. So, we're buying some pieces of bonds in the 50 to 80 basis point range. This is AAA portions of asset-backed securities, like credit cards and autos. This is two year in less paper. This is the only the AAA portion. So, as we are kind of moving -- we're moving some of this just to be outside of cash before it goes into security. So if you think about the core securities portfolio, which is also growing, you're closer to kind of 150 to 175.

[Operator:]

Thank you. Our next question comes from the line of Brody Preston with Stephens, Inc. Your line is now open.

[Brody Preston:]

I just got a question, Jefferson, I want to circle back to mortgage real quick. So I appreciate the guidance. The -- I guess, the mix of the production you're seeing in 1Q, you think you're at 54, 46 purchase refi. Is that a similar mix? Is what you're seeing in 1Q? Or has anything changed?

[Jefferson Harralson:]

The risk, similar mix.

[Brody Preston:]

And what was the gain on sale margin for the fourth quarter?

[Jefferson Harralson:]

I have it at 4%. That's right. Yes. 4%. We're expecting that to roll forward into Q1 and then we do forecast it to taper down as the year goes on.

[Brody Preston:]

Okay. What were average PPP loan balances for the quarter?

[Jefferson Harralson:]

$1 billion, almost even.

[Brody Preston:]

Okay. And would you expect I think you got a little like 6.40, 6.50, somewhere in there left, would you expect that to like, I guess, where are we in the pipeline of forgiveness? Is a big chunk of that going to be forgiven in 1Q? Or how should I be thinking about that?

[Rich Bradshaw:]

Jefferson, can I answer that one?

[Jefferson Harralson:]

Please do.

[Rich Bradshaw:]

So let me tell you on -- this is Rich. On second draw, one of the important things that we did was we told our customers that in order for them to submit for a second draw, they had to at least have their forgiveness submitted. And it was amazing how much came in, in the last two weeks. So we have just -- we did essentially $1.1 billion in fundings and at United. And then we also had Seaside because that was -- they were under the different model at the time. But anyway, we just crossed the $1 billion mark forgiveness that has been submitted to the SBA. And so we feel really good about that. So we're near the end of this one.

[Jefferson Harralson:]

So ELP will be close to zero and average will be, I would think, a little less than 500.

[Brody Preston:]

Okay, great. Thank you for that. The sub-debt and Truist redemption, that margin impact is just about like 1 basis point. Is that right, Jefferson?

[Jefferson Harralson:]

That's right. That's not a huge impact. Those are pretty small transactions.

[Brody Preston:]

Okay. And the loan growth guide for mid-single digit, is that ex-PPP or inclusive of the PPP runoff?

[Jefferson Harralson:]

It's ex-PPP.

[Brody Preston:]

Okay. I guess I'm having a hard time square in mid-single-digit with something close to the mid to high, I guess, just because you guys have been knocking the ball off the cover in terms of growth, and it doesn't sound like you expect that to slow down in the first quarter at all.

[Jefferson Harralson:]

I'm being conservative. I'm looking across my partners here because I can be a little bit overoptimistic. But it's a little hard to figure out what happens with stimulus. I'm always a little wary of pay off companies get bought. But we do feel good about the opportunity and the activity. So right now, I see the machine keep going and I really feel good about our hires, but that's what I'm saying right now.

[Brody Preston:]

Okay, fair enough. Jefferson, on the expense outlook, so it's $92 million for the first quarter. Could you just remind us -- I think the conversion slated for this quarter, sometime in February, is that correct?

[Jefferson Harralson:]

That's correct.

[Brody Preston:]

So are the bulk of those cost saves going to come post 1Q? Is that how I should be thinking about the run rate as we head into the second quarter?

[Jefferson Harralson:]

Yes. So you'll start seeing some here in the first quarter. So maybe -- and you're only getting one -- you're getting some cost savings starting in 12/31, but full run rate in second quarter. So -- but we'll also have merit some of the things that will offset some of that meriting.

[Brody Preston:]

And then I just got -- I just have two more. Rob, I just wanted to ask, specifically on the senior care credits. It's the second quarter in a row. I think you've called out some deterioration. And just looking at it, it looks like 30% of the portfolio is criticized at this point is, is that all so related just to the lease-ups taken longer to reach stabilization? Or have you seen that change in occupancy levels at all?

[Rob Edwards:]

It's a great question. The short answer is, yes, it's related to the lease-up properties. Our stabilized properties are running around to 80% occupancy. So, we see -- it's more of a one-off kind of thing. If you have a property that develops, COVID sort of comes in and you have some change in occupancy. We have seen that in one or two properties. But we've got 20 properties in the book. And when we have seen it, we've seen them come back actually quicker than I would have expected in occupancy. So, the stabilized properties, for the most part, are doing well, all of them with the exception of two above 70% occupied. So, I feel good about that, and it's really just the lease-up staging that is creating the challenge.

[Brody Preston:]

Okay, great. And then just on Navitas. You guys have had really strong growth there. And I know that there was a bit of a pullback maybe in the number of participants earlier in the year, just given the pandemic. So, I wanted to get a sense for just broadly what the outlook kind of looks like. Have you seen competition increase? And then as I think about the growth in the business model moving forward, is there anything kind of unique about what you all do here that, I guess, maybe a focus on a certain niche that will continue to allow you to take market share at an above-average rate?

[Lynn Harton:]

So, I'll start with that and see what other people have to throw in there. So during the summer, we saw competition decrease a little bit when there was fears of liquidity, especially from nonbank competitors. We have seen the competition, I would say, normalized coming into now, but we've -- this momentum that we've had from a business perspective is continuing. I think it's really due to a strong team. We have great hires. So it's --so I think the competition has normalized, but I think we should expect strong growth there. We are making we are continuing to make strong hires. We think we have some market share takeaway thesis happening as well there. And we have some budget there for them to hire people and grow that business in this year. I would expect a return to selling loans were pretty far away from our 10% self imposed limit. But just from -- as you know us, we're -- we think about risk quite a bit, and we think about diversification quite a bit. And with mortgage coming down as well, expect to see a greater amount of Navitas loan sales in 2021 versus 2020. And I feel like there's part of that question, I might not have answered.

[Brody Preston:]

Yes. The other part was just, is there anything kind of unique and niche that you focus on within Navitas that sort of will allow you to continue to take market share as some other folks step back into the market?

[Lynn Harton:]

Now, what I would say is, there's no -- there's multiple niches within the business. I think that's one thing that Gary and Mike and team have always focused on having a diversified approach. I would just say it's just it's a really extraordinarily well-run, well-led company. Gary has got a tremendous reputation in the business. Mike does as well. The technology, which is largely interfaces are self developed. That's the same team that built our PPP portal has created a product that's easy for employees coming in to manage the process with and sales that can be more successful at Navitas think with the team than others. So it's no one thing. It's just a lot of little things. There's no particular niche that is necessarily different.

[Jefferson Harralson:]

I see Chris in the queue. He may have come out. No he's on.

[Chris Marinac:]

Jefferson, can you hear me?

[Jefferson Harralson:]

I can.

[Chris Marinac:]

Great, I wasn't sure they announce it was waiting here. So my question just was the updated disclosure on the fair value marks with the past mergers and what's updated there at 12/31?

[Jefferson Harralson:]

Okay. Yes, I didn't understand the question on that one.

[Chris Marinac:]

Is there an updated fair value mark from CSID and past acquisitions?

[Jefferson Harralson:]

Yes, I don't have one, and we're creating that currently for the Q. So, we'll get back to you. Okay, at this time. So we'll get back to you on that shortly.

[Chris Marinac:]

No problem. And just a follow-up to Kevin's question earlier. When you look at the criticized ratio, curious, your capital and reserves are still strong. And if things do change and higher criticized happen, what's the sort of change in reserves based on that? I mean you saw of a buffer, I presume, I don't know if it's necessarily a direct correlation. Just curious if you do have some more criticized kind of how that impacts reserve behavior?

[Rich Bradshaw:]

So, we would have to look at it. You're right, there's not a direct correlation. But as -- and we believe we're properly reserved for the losses that we're projecting currently. But there -- the short answer is there's not a direct correlation there.

[Chris Marinac:]

Particularly not on criticized because you're not having specific reserves?

[Rich Bradshaw:]

No. Yes, definitely not on criticized.

[Chris Marinac:]

Great. Okay. Just wanted to clarity that and we'll take quarter-on-quarter. Thanks very much for all the information this morning.

[Rich Bradshaw:]

Thanks Chris.

[Lynn Harton:]

All right. Well, it looks like that's the last question. And so, thank you all for being here. Thank this team. I think it's a great quarter. Thanks to the United team listening in, great loan growth, great deposit growth, fee revenue. I appreciate everything you all are doing. And have a great day. Thank you so much.