Earnings Call: Q4 2020

Jan 20, 2021

Good morning, and welcome to United Community Bank's 4th Quarter 2020 Earnings Call. Hosting the call today are Chairman and Chief Executive Officer, Lynn Harton Chief Financial Officer, Jefferson Harrelson 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. Both are included on the website atucbi.com. Copies of the 4th quarter's earnings release and investor presentation were filed last night on Form 8 ks with the SEC and a replay of this call will be available in the Investor Relations section of the company's website atucbi.com. Please be aware that during this call, forward looking statements may be made by representatives of United. Any forward looking statements should be considered in light of risks and uncertainties described on Page 3 of the company's 2019 Form 10 ks as well as other information provided by the company in its filings with the SEC and included on its website. At this time, I'll turn the call over to 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 percent and we reached 16.3% in our return on tangible common equity. These numbers include a discretionary $8,500,000 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've 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 continue 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 failed at 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. Credit continues to perform well. Net charge offs were 5 basis points for the quarter and non performing assets were 55 basis points of total loans. We are seeing increases in criticized and classified loan levels, as you would expect, driven by COVID impacted segments. Our allowance was essentially flat for the quarter as improving economic forecast offset the provisions needed for loan growth. This was a strong quarter for the company and it reflects great efforts by our teams throughout the bank to maintain focus and continue to take care of our customers. For more details, I'll turn it over to the team here, and I'll start with Rob. 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 $243,000,000 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 4th quarter at 75 basis points, which is the best number that unit has reported since the Q3 of 2019. Our loan loss provision was $2,900,000 this quarter and totaled $80,400,000 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 $1,850,000,000 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 $71,000,000 at year end, but as you would expect, we did downgrade some loans, which drove increases in our criticized and classified loans. About $207,000,000 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 $12,000,000 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. Page 10 shows a walk up on the reserve in Q4. We put $3,300,000 into the reserve in Q4 due to loan growth, but our economic forecast improved a bit, which resulted in $2,200,000 coming out of the reserve. You also see a 3 point $1,000,000 increase from specific reserves, which corresponds with the C and I increase of NPAs in the quarter that you saw on the previous page. Net net excluding PPP loans, our reserve percentage was basically flat at 1.38%. With that, I'll pass it over to Jefferson. 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 2 relatively small redemptions of a sub debt and a trust preferred in the Q1. We are optimistic we can put some capital to work via M and 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 $50,000,000 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 $671,000,000 of PPP forgiveness and our 17% annualized or $629,000,000 in 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 non interest income, albeit down from last quarter's record result. The main driver of the decrease from last quarter was mortgage, down $6,100,000 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. Our mortgage production in January has started off as strong as ever, but with the gain on sale normalizing downward, we are expecting 1Q mortgage fee income in the $14,000,000 to $16,000,000 range. We did sell some $17,000,000 of SBA loans in the quarter, driving a $1,500,000 gain on sale and we expect to be selling a greater amount of both SBA and Navitas loans in 2021 versus 2020. On Page 15, we talk on expenses. Excluding merger related and other costs and our discretionary contribution to the foundation, our expenses came in at $95,500,000 This $95,500,000 result included a $1,800,000 accrual for paid time off or PTO, as this year we allowed our employees to carry over 80 hours of PTO into 2021. Assuming people mostly stay with United in 2021 and we return to normal operations in 2022, we would expect to get back the lion's share of this $1,800,000 in 2021. All said, I anticipate that our Q1 run rate of operating expenses is plus or minus $92,000,000 with a low single digit growth rate from there. Moving to Page 16, we were very pleased that we were able to work with and help our customers achieve forgiveness on their PPP loans and at twelvethirty one we had over 50% of our customers' loans forgiven. PPP has been and continues to be a major tool that we are using to attract new customers from other banks and we think we will make great progress with more forgiveness in the Q1. I'll finish there and pass it back to Len for closing comments. 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 filled with challenges that never would have been expected 12 months ago. In spite of those challenges, we produced record levels of pretax, 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 point $1,000,000,000 in growth, up 23%. We also had record mortgage production, which nearly doubled in 2020 to 2,100,000,000 dollars 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 welcomed a 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 Luxe. We enhanced our Board with the addition of Jim Clements, President of Clemson University. And we made investments that will give returns for years to come with the establishment of our foundation and a new department focused on community development and engagement. I'm excited about 2021, and I believe we'll continue to see opportunities to improve and grow, thanks to an outstanding team throughout the company. I'd like to now open it up for questions. Thank you. Our first question comes from the line of Brad Milsaps with Piper Sandler. Your line is now open. Hey, good morning guys. Good morning, Brad. Jefferson, maybe I wanted to start with the balance sheet. Obviously, you guys have had tremendous deposit growth this year. You're trying to figure out ways to put all liquidity work continues to be a challenge in the past. I think you've talked about mid single digit type loan growth in 2021. 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 the liquidity, whether it 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 a way to the loan growth and kind of how that impacts the NIM? Yes. So I'm going to pitch it to Rich to start on the loan growth and I'll take that and weave it into the story for the balance sheet. 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 loan growth, you're going to see some of the same things you've been seeing already. First of all, we expect another $600,000,000 in from PPP forgiveness, so more cash in. So we probably become slightly more liquid again for 1 more quarter. We are expecting the balance sheet to stay relatively flat to higher. We expect these deposits to 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 $1,100,000,000 of cash, again with more cash coming in. We're going to first use it for loan growth, then you're going to see securities growth from here. We had about $600,000,000 of securities growth this quarter. I would expect something relatively similar next quarter. And then from there, I would expect a relatively stable size balance sheet with a mix change from cash to securities and securities to loans. Great. That's helpful. And maybe just kind of one follow-up, maybe for Rich. We've got round 2 of PPP coming or it's here, I suppose. Would you guys expect to sort of participate kind of at the same level you did in round 1, 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? 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 1900 applications come through for about $230,000,000 gives you an average loan size 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 2,000,000 dollars versus $10,000,000 So there are some changes. So we're anticipating, I'm going to call it $400,000,000 to $450,000,000 to be the total demand. And right now it feels like we're in the right position. Remember, it's called the 2nd 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 it's really very easy for us to process. And this time around, there's very little to do on loans less than $150,000 Great. Thanks for all the color. Yes, sir. Thank you. Our next question comes from the line of Michael Rose with Raymond James. Your line is now open. Hey, good morning guys. I'm 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? Yes, that's it. Yes, thanks for the question. So yes, I think we are. In the Q1, I'll 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 change. This is not including really anything with PPP2. So think of this as a sort of a forecast or my thoughts ex PPP. 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 2 years or so. What are your 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. Sure. Michael, this is Rich again. Great question. So in January, we have hired 10 commercial people, 1 private banker in there to give you a feel of those 10, 6 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, 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 1st 3 months, they were doing PPP. And but what I'm really proud to tell you is that team did $65,000,000 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. That's very helpful. Maybe just one more for me, but just more of a strategic question. You guys did the Seaside deal. You have a presence in Florida now. What do 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 and A as well? And then has there been any change in the types of deals that you guys would look at? I think you've historically done and talked about kind of down to $500,000,000 but up to kind of $2,000,000,000 or $3,000,000,000 in size? Thanks. Yes. So great question. 1st 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 2 retail locations to the Florida franchise that we're excited about. With that said, we would be very interested in doing additional M and 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 do some have some good things to happen this year. Great. I appreciate all the color. Thanks. Thank you. Our next question will come from the line of Jennifer Demba with Chula Securities. Your line is now open. Thanks. Good morning. 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. 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, etcetera. 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. Thanks so much. Thank you. Our next question comes from the line of Kevin Fitzsimmons with D. A. Davidson. Your line is now open. 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 should we expect in the next few quarters, do you view this quarter as more of a one time like pent up catch up in downgrading those credits? Or would you expect a similar kind of pace of downgrades and increase to criticize the classifieds? Thanks. Hey, 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 a our lowest pass risk grade increased by about $180,000,000 in Q3. And obviously, a lot of that went into criticized and classified during Q4, that lowest pass grade in Q4 declined by $50,000,000 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 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. Rob, maybe talk about the primary driver criteria. What puts something in the criticized category, which is really the increase is really more in the criticized category versus the That's right. Yes, that's right. So, if we have a credit that can't make amortizing P and 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. Okay. Great, Rob. I appreciate that. And Jefferson, just one quick follow on on expenses. 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? Well, you mentioned the biggest one that you'll see is the $2,000,000 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 6 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 we think are that are ongoing that we think can can help. All right. That's great. Thank you. Thank you. Our next question comes from the line of Catherine Mealor with KBW. Your line is now open. Thanks. Just wanted to follow-up on some of the commentary, Jefferson, you made on the margin and thinking about those 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 portfolio sits 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? Thanks. All right. Thanks on that. And the 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? I would say we've seen a little of that, but not a great amount. And so we're I'm not concerned about it at this point. 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. Okay. That's great. Now on the securities yields, where are the new securities yields coming on that $600,000,000 you're investing per quarter? 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 2 year and 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 securities. So if you think about the core securities portfolio, which is also growing, you're closer to kind of 150 to 170 5. Okay. That's helpful. Thank you. Okay. Thank you. Our next question comes from the line of Brody Preston with Stephens Inc. Your line is now open. Hey, good morning, everyone. Good morning, Brooks. Good morning. I just had a question, Jeff. So I want to circle back to mortgage real quick. So appreciate the guidance. I guess the mix of the production you're seeing in 1Q, I think you're at 54, 46 purchase refi. Is that a similar mix as what you're seeing in 1Q or has anything changed? Service rigs, similar mix. Okay. Okay. And what was the gain on sale margin for the Q4? I have it at 4%. That's right. Yes, 4% and we're expecting that to roll forward into Q1. And then, it will we do forecast it to taper down as the year goes on. Okay. Thank you for that. What were average PPP loan balances for the quarter? $1,000,000,000 almost even. Okay. And would you expect I think you got a little like $640,000,000 $650,000,000 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? Jefferson, can I answer that one? Please do. So let me tell you on this is Rich. On 2nd draw, one of the important things that we did was we told our customers that in order for them to submit for 2nd Draw, they had to at least have their forgiveness submitted. And it was amazing how much came in, in the last 2 weeks. So we have just we did essentially $1,100,000,000 in fundings in at United. And then we also had C side because that was they were under the different model at the time. But anyways, we just crossed the $1,000,000,000 mark in 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. Okay. So EOP will be close to 0 and average will be, I would think, a little less than 500. Okay, great. Thank you for that. The sub debt and trust redemption, that margin impact is just about like 1 basis point. Is that right, Jefferson? That's right. That's not a huge impact. Those are pretty small transactions. Okay. And the loan growth guide for mid single digit, is that ex PPP or inclusive of the PPP run off? It's ex PPP. Okay. I guess I'm having a hard time squaring mid single digit with versus something closer to 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 Q1 at all? I'm being conservative. I've been 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 weary of payoffs, companies get bought, but we do feel good about hires, but that's what I'm saying right now. Okay, fair enough. Jefferson, on the expense outlook, so $92,000,000 for the Q1. Could you just remind us, I think the conversion is slated for this quarter sometime in February. Is that correct? That's correct. 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 2nd quarter? Yes. So you'll start seeing some here in the Q1. So maybe and you're only getting one you're getting some cost savings starting in twelvethirty one, but full run rate in Q2. Okay. So yes, but we'll also have merit in some other things that will offset some of that merit increase. And then I just got I just have 2 more. Rob, I just wanted to ask specifically on the senior care credits. It's the Q2 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 that all still related just to the lease ups taking longer to reach stabilization? Or have you seen any change in occupancy levels at all? That's a great question. The short answer is yes, it's related to the lease up properties. Our stabilized properties are running around 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 1 or 2 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 2 above 70% occupied. So I feel good about that and it's really just the lease up staging that is creating the challenge. Okay, great. And then just on Navitas, you guys have had really strong growth there. And I know 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 we 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? 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 non bank competitors. We have seen the competition, I would say, normalize 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 the strong team. We have great hires. 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. We're pretty far away from our 10% self imposed limit. But just from as you know us, we think about risk quite a bit and we think about diversification quite a bit. And with mortgage coming down as well, I would 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. Yes. The other part was just, is there anything kind of unique and nichey 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? No, 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 I mean, 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 the 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, I 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. Awesome. Thank you all for taking my questions. I appreciate the time this morning. Yes, great questions. Thank you. I see Chris in the queue. He may have come out. No, he's on. Hey, Jefferson, can you hear me? I can. Welcome. All right, great. I wasn't sure if the announcer was waiting for. So my question just was the updated disclosure on the fair value marks with the past mergers and what's updated there at the twelvethirty one? Yes. I don't understand the question on that one. Just is there an updated fair value mark from Seaside and past acquisitions? Yes, I don't have one. We're creating that currently for the Q. So we'll get back to you of the K at this time. So we'll get back to you on that shortly. No problem. And just a follow-up to Kevin's question earlier. When you look at the criticized ratio, I'm just curious, your capital 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 the buffer, I presume. I don't know if it's necessarily direct correlation. Just curious if you do have some more criticized kind of how that impacts reserve behavior? 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's the short answer is there's not a direct correlation there, particularly not on criticized because you're not on specific reserves. No. Yes, definitely not on criticized. Great. Okay. Just wanted to clarify that and we'll take it quarter to quarter. Thanks very much for all the information this morning. Thanks, Chris. All right. Well, it looks like that's the last question. 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. Appreciate everything you all are doing. And have a great day. Thank you so