Q1 2021 UMB Financial Corp Earnings Call
Good day and welcome to the U M B 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 <unk>.
After todays presentation, there will be and opportunity to ask questions to ask questions. You May Press Star then one on and they touchdown and found 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 Shocker, CFO will share a few comments about our results Jim Rine CEO of <unk> Bank and Tom Carey Chief Credit Officer will also be available for other 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 and any forward looking statement for.
And we're 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 crusher that he started saleable online on Investor Relations Dot UMD Dot Com now I will 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 for 2021, we had strong balance sheet growth supported by stable and diverse funding sources continue to fee income momentum and solid asset quality metrics all.
Core elements of our investment thesis delivered on a consistent basis.
Consumer sentiment and 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 and returning to pre pandemic levels operationally, it's status quo as most of our non branch associates remain remote and 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 pretax pre provision income on an FTE basis was $108 7 million or $2.24 per share.
You may have noticed our quarterly debt 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 and 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 Ron 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 P. P P and income as well as the day count and the quarter.
On a year over year basis, net interest income increased 11, 6%. Despite the challenging interest rate environment, our track record of relative outperformance and 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 and many of our underpenetrated markets and Virtu.
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The income for the quarter was impacted largely by swings and investment security gains and losses, and the first quarter and evaluation of our position and tattooed share drove a $16 1 million dollar mark to market unrealized loss compared to the 108 $8 million fourth quarter gain excluding market fluctuation.
And there were some bright spots as we continue to focus on growth and fee income Trust and securities processing income increased 8% from the fourth quarter and nearly 17% on a year over year basis.
And the businesses that drive that line and have experienced solid growth benefiting from both market appreciation and new sales activity and fund services assets under administration now stand at 345 billion compared to 252 billion a year ago.
Salty 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 and provide FDIC sweep and passive custody services among others, we added for Fintech relationships and 2020 and have an active pipeline.
And we're seeing some traction from recent investments and 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 40% of non mortgage loan applications and 22% of new retail deposit accounts were initiated online and the first quarter Jenny.
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 and investing in customer facing application 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 has shifted and we haven't forgotten the importance of connecting with other customers.
Moving to the balance sheet, we once again posted strong loan growth with an eight 4% linked quarter annualized increase and average balances excluding PPP.
<unk> 23 is a snapshot of our diverse loan portfolio, followed by quarterly loan activity and CRE, we're seeing traction and our expansion markets growth and C&I came from a variety of industries, this quarter, including materials and commodities technology and commercial services. Additionally, our success and building our mortgage.
These capabilities has continued as evidenced by the nearly 7% increase and average residential mortgage loans from the fourth quarter of 2020.
Which are included and the consumer real estate line on the balance sheet.
New originations for the quarter were 689 million outside of the P. P P balance changes.
With payoffs and pay downs of 3% of loans.
Looking into the second quarter, we see a robust pipeline and both C&I and CRE. Despite some uncertainty related to the COVID-19 and trends and the status of reopening and 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 seven 5% on a linked quarter basis, and 28, 8% compared to the first quarter of 2020.
Da growth helped drive the cost of total deposits to just 10 basis points.
Leading to a total funding costs for 16 basis points.
Our average loan to deposit ratio, while typically much lower than our peers with 61 per cent for the quarter.
Our differentiated customer base, which drives diverse sources of funding and revenue comes with larger deposit balances.
Ron will provide more detail about how we're managing our liquidity position and this environment.
On slide 25.
We've updated our exposure to sensitive industries as we move further through the pandemic. We've adjusted this lifts to reflect both the characteristics of our portfolio and the evolving and outlook for various categories changes. This quarter include the removal of oil and gas based on our borrower performance and stabilize and oil prices.
And a student housing and CRE, where industry occupancy levels are improving.
Loan and the three remaining categories total $1 4 billion or nine 2% of loans excluding PPP.
After our typical analysis is mitigating factors, including strong sponsors and guarantors and we feel that approximately $765 million.
For a $5 one per cent of alone could possibly carry more risk and a prolonged crisis.
And as always we remain in close contact with these borrowers.
At the bottom of the page Youll see that our modified loan balances have continued to decline and in the quarter and just $14 million under one half of 1% on loans.
On the credit front net charge offs average just 13 basis points and loans.
Well levels and nonperforming assets improved from the end of the prior period.
As we noted last quarter, improving macroeconomic conditions and the continued quality of our loan portfolio drove the $7 5 million negative provision.
And the economic backdrop continues to normalize and business conditions improve additional releases maybe weren't.
Total allowance for credit losses on loans stand at $202 8 million with an allowance for loan coverage of 123%, excluding PPP loans that coverage is 1.3 or four per cent.
To wrap up and I'm pleased with our first quarter performance and I'm excited about the opportunity, we see and the remainder of 2021 and beyond.
Our 2020 corporate citizenship report has just been published and is available on our website and 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.
And this balance has helped guide our response to the COVID-19 crisis now I'll turn it over to Rob for a few comments from.
Thank you and Mariner net interest income of 194 million was comparable to the prior quarter and included approximately $13 million and loan income from P. P. P balances on a linked quarter basis NII levels were flat at the benefits from earning asset growth were mitigated by the impact of two fewer days.
As well as lower loan fees.
Loan yields were three seven and five per cent compared to 3.7 and 8% on the fourth quarter and total earning asset yields decreased 21 basis points to 2.7, and 4% due largely to the $1 8 billion of increase liquidity.
Our fed accounts reverse repo and cash balances average $4 5 billion and the first quarter, comprising 14% on average, earning assets and yielded 32 basis points compared to $2 6 billion or 9% of earning assets and 45 basis points and the fourth quarter.
The excess liquidity buildup.
Seasonal inflows from our public funds and other businesses as well on the benefits from federal stimulus programs.
The 19 basis points decline and net interest margin on a linked quarter basis was driven largely by excess liquidity, if those balances and remained consistent with prior quarter on a 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.
And Mariner mentioned, our business model makes our experienced unique and seasonality of funding from other municipal clients and large institutional volumes, including and our aviation and truck business add variability to our liquidity positions.
And besides funding loan growth opportunities.
We continue to deploy a portion of this liquidity as well as cash flow from our securities portfolio to increase our air force portfolio footings.
Evidenced by the 2 billion increase and these balances from last year.
During the quarter alone, we purchased one $3 billion of securities that yielded one point for 2%.
Given the excess money supply and 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 P. P. P forgiveness and reinvestment rates on cash flows and the securities portfolio. Overall, we would expect some modest margin pressure and the second quarter.
Non interest income was $108 9 million for the first quarter and contained at $16 1 million pretax losses on the valuation of our T. T C up investment, which was partially offset by mark to market gains on equity and other poll links and for $3 million and gain from the previously noted sales of priority.
Capital management at the end of March.
E coli income decreased $4 4 million with its typical offset and reduced compensation expense.
The details of our various fee income lines are shown on slide 21, and Mariner and common done and some other growth opportunities, we have seen and several of those businesses.
On the expense side, we saw a reduction of $25 9 billion 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 and FICA insurance and 401 K expense.
The tax rate was $15 four per cent for the quarter for the full year 2020, one we anticipate it will be approximately between 15% to 17%.
We've continued to maintain strong capital ratios with our total risk based capital at 14 point to 8% CET one ratio at $12 two five per cent and.
And leverage ratio at 8.08 per cent.
Our tangible book value per share increased 12, 2% during the last 12 months to $57 and 26 at March 31.
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 one on a touchtone phone if you're using a speaker phone. 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 two.
At this time, we will pause momentarily to assemble our roster.
And the first question comes from Ebrahim <unk> with Bank of America. Please go ahead.
Good morning.
Hey, good morning, Hey.
And I guess, just the first question and Tom sticking with on net interest income one to clarify it.
On guidance for more discretion to kill is I'm, assuming for the GAAP margin and cash.
And 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 like do you expect to operate with does that elevated liquidity levels and the near term just give us your thought process on managing liquidity was investing and the bond book.
Yeah sure.
Warranty Pam Mariner all on it.
Start with some high level sort of background information and Roms and talk about our deployment strategies and other things we're doing.
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 on liquidity for you and be in addition to that 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 what we monitor that not only is it sticking around but it's growing and so on a year over year basis were up.
And 30% deposits and that's really hard for it no matter, what you do to keep up with that and so that's kind of a backdrop and I would say.
We oftentimes from Bill says and what do you what are you doing about that liquidity is if we're not doing something about it.
And I'll recognize you know we have industry, leading loan growth so I.
And I feel we're doing a pretty good job of deploying it and general and it's just it's just it's just a tough it's 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.
And <unk> about it on a go forward and perspective, yeah sure Ebrahim as I said in our prepared comments right. So we have been pretty active in deploying this liquidity you can see it on our balance sheet. Our Ams portfolio was up about 2 billion from a year ago and just in the fourth or the first quarter alone we bought about $1 $3 billion of securities both mortgage.
And from munis as well so we are being very active and deploying this and we're also looking at other options given some of this liquidity is going to be here to stay with us until another six to eight quarters. So.
So we are over buying bonds in excess of what our cash flow from our securities portfolio is doing and then on the margin and true to what are you and be cultures will also do investment options like we'll buy small pools of mortgage loans and I'm not talking anything big 100 $150 million, we're doing Tri Party reverse repos and then when available.
And <unk>.
<unk> done 25 to 50 million and.
Diversified pool of sub debt and 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 those liquidity isn't earning 10 basis points on the pet accounts, but yes, we are really active and looking at different options to deploy this liquidity and and the first part of your question just to clarify yes on a GAAP.
Margin basis, some modest pressure and the second quarter, but.
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 and the deployment that net interest income should be a differentiated story and that's our investment thesis as we've highlighted in our Investor Day, I said that last quarter I mean, it's it's NII right now and this for interest rate environment, we really.
We feel like it should focus on our ability to grow earnings for NII.
And so I guess the message is $180 seven and ex PPP NII that should be headed higher from here and.
And do you have the details on the remaining PPP fees and just any sense of other breakdown off round, one was as to how the forgiveness proceeds.
And so we have another $25 million of unrecognized revenue from <unk>, one and PPP too.
Left again, the calendar of when we get to recognize recognize this will depend on on the forgiveness process. Obviously, we have about $10 million left on our PPP. One so that's probably coming through in calendar year 2021 at this point, it's too early to say about 'twenty those PPP too we did.
Oh did you need about $420 million as part of the PPP program that you'll see on our balance sheet.
Got it and just.
Moving on Mariner. So obviously me they think revenue growth above average loan growth is being sought for differentiating aspect for U M. B.
Just looking at the loan production levels, I guess and one of your slides on.
24 that declined year over year and was the weakest and 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.
B and that high single digit flow double digit change for the year.
I I'm trying to sort of 25.
Sure.
And I just want it for you are seeing.
It says gross loan productions down all your other weird.
I think that's just timing.
That's most of the timing, we continue to see growth across the board.
So that's that there's nothing to that story really.
One headwind we have on our C&I business is just a lower utilization and.
That's that's a significant opportunity as we roll forward is as the economy opens up and.
Things normalize we should we've got about four percentage points off our regular.
Utilization rate and I know everybody is talking about that but that's late and earnings power there and growth.
But we're making up for that really across the board I would say, both geographically and vertically.
And and that that slides just more of a timing thing on a year over year basis.
So we look for second quarter.
And as I've mentioned on my comments looks.
And it looks.
Strong.
Got it and then just one last one if I may in terms of capital deployment and talk to US means you talked about some fintech partnerships, you've previously talked about bank and many U.
The Western Pennsylvania minds that and tell me the ability to deploy capital and Inorganically.
Yeah.
I don't really have anything new to say than what I've been saying for some time, there and where where we have and active.
M&A process, we are.
Actually having conversations with.
Other other bank and.
We're just.
And for the right deal and we're not going to do we're not going to go do something just to do it. So we're looking for the right deal on and and <unk>.
And active process and on the on the non bank side as.
As we've said before we're always in the market looking for bolt on opportunities for our corporate Trust business, our public finance business our.
Sure.
You know fund services business, which by the way year over year, we were up a 100 billion and assets under administration and our fund services business. So across the board on institutional business was a very very strong and we are always looking for those.
And those bolt on opportunities continue to consolidate.
And Ebrahim. This is Jim Ryan on the Fintech side, those 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 and a box type model, but all for FDIC sweep our accounts service.
And debit.
Debit cards et cetera, so that will provide the additional fee income and.
Partnerships with those folks versus.
Looking to acquire and most of the opportunity is right.
And do you break down there on the contribution from these partnerships.
Or the kind of the fintech fees or deposits.
We do not make that public separately from the rollout.
Alright, thanks for taking my questions.
The next question comes from Jared Shaw with Wells Fargo. Please go ahead.
Hi, good morning, and that's actually Qunar, Brazil or filling in for Jared.
Maybe first on on.
And expense is great quarter for expense run rate and.
And if I recall correctly, I think theres, a little bit over 9 million of kind of seasonal payroll expense from the quarter. As we look ahead does all of that fall through to the bottom line and the second quarter and some of that rolls off or are there going to be.
Investments made that is going to offset some of that reduction.
On why don't you picked up yeah, like we said last quarter team Alright, our expense run rate is about 200 202 million on any particular quarter. It goes up and down but you are right. There are some seasonal increases that are typical for the first quarter like FICA and so that can.
It decreased by $3 million to $4 million as you go into the second quarter and then.
A large part of our expense base and as I've said before is also variable rate and nature of like bonus and commissions, so when bond trading or other business activities and really strong that can also skew our expense from one quarter to another quarter and one thing that I would say in terms of.
Looking ahead right we were.
Announced the sale of Prairie capital management and.
And you know annually, that's about $15 million of expenses. So youll see that received starting the second quarter.
So as you think about expenses going forward I would I would model it that way as well.
Okay. That's good color and then maybe if I could just follow up on Ebrahim and his question on loan growth.
And it's been a couple of quarters now where the conversation has been about growing balances and under represented markets I'm. Just wondering how much more runway. There is there and then b and the back end of the year as some other more traditional pipelines come back on line should we expect to see growth accelerate from here or is this kind of a good level to see loan growth.
Moving forward for a longer period of time.
Yeah. So.
What I'd say about that is that it's it's much longer and a couple of quarters, we've got a.
On a decade of close to double digit loan growth behind us.
And.
We don't really expect anything different than and the future than what we see and the path.
The the commentary about that penetration is theres, a theres a pretty big long term runway across our footprint as you think about penetration so.
Almost every market, we're in and outside of Kansas City is larger by population and business activities and Kansas City, and we have very low market share and almost all of them. So it's through just pure execution and having the right teams on the ground and we've got a really long runway really across the board both geographically and vertically.
And this is Jim Ryan and what that means is it's not dependent on <unk>.
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 authority there.
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.
Alright, Thank you for the question.
Thanks, Steve.
Okay.
The next question comes from Chris Mcgratty with K B W. Please go ahead.
Hey, good morning.
And gross margin.
Well, maybe I'll start with you.
The 15 million and just for modeling purposes. The 15 of expenses from Prairie, What's the could you provide the revenue run rate that we need to remove as well, yes, and just look at the last couple of years, it's averaged about $16 million to $18 million, mostly and fees all of it is fees.
Net net contributions anywhere from $2 million to $3 million.
Okay.
Yes got it Okay and then.
And just kind of putting the pieces together with the constructive.
Look on revenue.
And the good expense quarter I mean, you had on 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.
And 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, but our revenue profile. So.
Absent.
Any headwinds or challenges that come our way that we do feel like.
So on some level of operating Leverages is reasonable to expect yes, I would agree with that.
Okay.
And then on credit we've seen a lot of angst.
The reserve down.
Because of the improvement and the economy, how do we I think you alluded to that for the releases can be on the horizon, how do I think about Romney the trough I guess, where do you get to and win relative to day one of <unk>.
And last year with seasonal.
So.
This is mariner.
We.
We're very careful about this and cautious about it because we think that.
And the reserves are there for a reason.
And our business, where and the risk business and so we're monitoring it closely and obviously and the methodologies that qualitative and quantitative the quantitative stuff's going to be what it is.
Driven by the performance of our loan portfolio and the growth for our loan portfolio.
And the Moody's.
Indications around economic activity and and unemployment so that piece will be what it'll be and then we will overlay from qualitative things based on.
Other uncertainties and such to to make sure that the reserves are there to protect us and protect our shareholders. So.
We are on the track on the trajectory that we're on right now it is very reasonable to expect that we would do and other.
Release in the second quarter, what that looks like how big it is we're.
We're not prepared to give you any any real guidance on that.
That's great.
And then lastly, if I could just I just want to make sure I saw the announcement on the buyback, which I know you kind of pull.
Authorize every year, but I'm, putting the pieces together and what you said last last quarter Mariner I mean, that's still kind of bottom of the Ron in terms of priorities with capital and buybacks.
Absolutely we are number one focus is.
Is to grow and grow shareholder value and and investing in growth.
And that's the number one priority.
Got it thank you.
Thanks, Chris.
As a reminder.
If you have a question press Star then one to be joined into the queue.
The next question comes from Nathan race with Piper Sandler. Please go ahead.
Yeah, Hi, guys good morning.
Okay.
The the growth on the institutional fee income side, it's been pretty impressive and the last few quarters, just trying to get incentives and of that growth rate on the asset servicing and corporate trust side of things and sustainable kind of near the rates and we've seen recently or if you guys are expecting somewhat of an acceleration just based on some of the pieces that had been put.
And place recently.
I'll take I'll take that does start with it and then Jim can jump in but I, what I would say about six fund services.
With all the liquidity that's in the system right now and.
And what has happened with interest rates.
<unk>.
The pursuit of return has been pretty accelerated.
Accelerated.
Driven a lot of activity and the alternatives and private over the last few years.
Don't see that slowing down and our fund services business is set up we were one of the largest and most successful players in the private and alternative space.
And so what you've seen and less benefit from that activity and liquidity and the move from public investing to private investing we.
We don't see that slowing down we expect to continue to be a major recipient of that.
That shift and the way money is being invested along with that you have the democratization of private and investing which is.
Gone much further downstream into the debt.
And the spectrum of who can invest and privates.
So all of that bodes really well and the funds space for the privates and alternatives. So that that's what I said the backdrop for our fund services business pipeline is very strong technology platforms, great, we're efficient and got it.
Top flight team, we've been able to pick off people from all our competitors.
And because of all the consolidation and that business and sort of put a lot of our competitors on the sidelines. So we're very excited about what's happening and fund services.
Corporate Trust business, we continue to consolidate there and that business is poised really well for win win and is on let's say when I because I believe it's likely to happen.
The infrastructure Bill comes through we will be poised on a national basis.
And through corporate Trust and our public finance business.
And to.
Underwrite sell and do all the escrow and trustee services really across the country. We have offices in New York now, we're doing business in Florida, and New York New Jersey.
A large large projects hundreds and hundreds of millions of dollars type projects, which is a big shift from the kind of size deals we were doing prior to <unk>.
Moving on office opening offices on the coast so.
And we're kind of clip and on the heels and number one number one and number two is the third largest trustee and paying agent and the country. We're looking for call. It consolidation opportunities there are.
Our specialty business and the air in the aviation space, we're very excited about particularly as economies starting to open up again.
That means and the Boeing issues resolving themselves means planes were going and getting be getting bought and sold across the globe. Our Irish office in Dublin and allows us to do business now and 70 more countries and we were able to before Ireland and sort of the structured finance capital for old and so that.
Allows us it really opens doors for us business globally.
That's the corporate trust and on our our bankruptcy trustee business as is.
And it's doing very very well there too.
I think we just had our first $2 million per quarter and that and that business and.
And the first quarter, so very very excited about that and then our Jim touched on R. R.
Industrial solutions business, which.
It was on a relatively mature business relying on the other.
Wire houses and brokerage firms and now we're seeing and grow again by providing the same services for Centex and you can see and on our debt there before latest fintech companies that have signed up to do to do business with us.
<unk>.
And then our wealth business.
So you asked about institutional so I'll pause there and we've talked about that I would say the only thing to add on the institutional business is that.
The rates have gone down we've seen the <unk> one fees erode and then as rates go back up that business will continue to be.
Additives as those come back so we've been growing the traditional fee side and then as rates go back up we'll see <unk> one fees.
So mariner hit all the highlights on that I don't have anything else to add other than you can see additional youll look to see additional growth as rates on Peru, I always feel Jim's commentary I'm used to it.
Got it.
Great color I appreciate that and all the other.
Details on the updated slide deck as well.
Perhaps just changing gears and I'm just going back to the M&A discussion just curious with the stock still near all time highs and you know obviously, having a strong currency to affect transactions going forward, if youre feeling more or less optimistic on the acquisition front on a whole.
Pink perspective looking forward over the course of 2021 here.
And.
I'm not sure I understood.
You might assets, we feel optimistic.
Oh, yes.
Yes.
No.
Certainly I would say if you're talking about just the industry backdrop deals were getting done.
No.
Pricing seems to be getting some consistency and there seems to be some foundation being built for deals to get done so.
We'd like to think so we hope so but.
You know again, we don't do ticker tape deals, we're not going on.
Dig deep into something Thats that has some hair on it just to get something on worst warehouse keeps keeps who are.
Keep to our guidelines to keep within the rails are doing good quality and high quality deals and and and.
Rich.
And to build relationships you what happened.
Okay, Great I appreciate all the color. Thank you guys.
Thanks Nate.
Okay.
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.
And 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 the wealth management business and a very nice quarter, we talked mostly about and institutional on the fee side, but our wealth business had a very strong first quarter with new business and and I did mentioned and our prepared comments that we've launched our <unk>.
Family Office business, we think we have a very unique offering.
And excellent CIO for that business comes to us from the private side.
Private investing sides for Northern Trust ran that for the institutional segment for northern and so we're very excited about our.
Our wealth offering we have the right.
And as an institution has been around a really really long time.
Justin partner with institutional capital and institutional backing.
We were very excited about how that coupled with our commercial business and and the prospects for that going forward. So that's the only thing I would add.
And other than that I appreciate everybody's time.
No.
Thank you thanks, Mariner and thanks, everyone for joining us today as always you can contact Investor relations at eight one and 68607106 and we appreciate your interest and time and have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yes.
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