Good day and thank you for standing by. Welcome to the Atlantic Union Bankshares Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to your host today, Bill Cimino, Investor Relations. Please go ahead.

Thank you Michelle and good morning everyone. I have Atlantic Union Bankshares’ President and CEO, John Asbury and Executive Vice President and CFO, Rob Gorman with me today. We also have other members of our executive management team with us for the question-and-answer period. Please note that today’s earnings release and the accompanying slide presentation we are going through on this webcast are available to download on our investor website at investors.atlanticunionbank.com. During today’s call we will comment on our financial performance using both GAAP metrics and non-GAAP financial measures. Important information about these non-GAAP financial measures, including reconciliations to comparable GAAP measures, is included in our earnings release for the fourth quarter and fiscal year 2021 which is also available on the Investor website. Before I turn the call over to John, I would like to remind everyone that on today’s call, we will be making forward-looking statements which are not statements of historical facts and are subject to risks and uncertainties. There can be no assurance that actual performance will not differ materially from any future results expressed or implied by these forward-looking statements. We undertake no obligation to publicly revise or update any forward-looking statements. Please refer to our earnings release for the fourth quarter of 2021 and our other SEC filings for further discussion of the company's risk factors and other important information regarding our forward-looking statements, including factors that could cause actual results to differ from those expressed or implied in any forward-looking statement. All comments made during today's call are subject to that Safe Harbor Statement. At the end of the call, we will take questions from the research analyst community and now I'll turn the call over to John Asbury.

Thank you Bill. Good morning and thanks to all for joining us today. I will begin with some high level thoughts on our performance environment, some changes we have made and how we are thinking about our growth strategies. Looking back at 2021, it was a challenging but successful year for Atlantic Union Bankshares. While there were ups and downs with the continuing pandemic, Atlantic Union had a strong finish to 2021 and we're optimistic as we enter 2022. Our operating philosophy of soundness, profitability, and growth served us well this year as we continue to navigate the ongoing challenges of operating in a pandemic. While we are mindful of the current Omicron surge, we don't see it derailing the fundamental positive trends of a growing economy, declining unemployment, and the most benign credit environment I've witnessed in my 34-year career. Further that the Federal Reserve has signaled multiple short-term rate hikes in 2022 is good for us as we remain fairly asset sensitive heading into what appears to be the beginning of a rising rate cycle. There are still headwinds as supply chain disruptions continued, they also appear to be on an improving trend and business clients are still challenged to fill open positions, we think all of this will improve as the year goes on. On the revenue front, last quarter I mentioned we believe we had a quelling spring for loan growth and that we expected solid growth in the fourth quarter. I think we can say we finished better than solid with 11.7% annualized loan growth during the quarter exclusive of PPP, this is the best we've seen since the pandemic started. Loan growth was so strong we returned point-to-point low single digit growth for the full year, exclusive of PPP. While we would rather see…

Thank you, John and good morning, everyone. Thanks for joining us today. Now let's turn to the company's financial results for the fourth quarter. Please note that for the most part, my commentary will focus on Atlantic Union's fourth quarter results on a non-GAAP adjusted operating basis, which excludes the financial impacts of the strategic actions taken in the fourth quarter. Specifically, adjusted operating earnings excludes pre-tax restructuring cost of $16.5 million or $13.1 million in after tax expenses related to the decisions to close the company's operations center, to reduce excess office capacity and to close 16 branches or approximately 12% of the branch network, both of which will be completed in the first quarter of 2022. As a result, the company expects to lower its annual expense run rate by approximately $8 million beginning in the second quarter. Adjusted operating earnings for the fourth quarter also excludes the pre-tax gain of $5.1 million or $4.1 million on an after tax basis related to the sale of Visa, Inc. Class B common stock in December. For clarity, I will specify which financial metrics are on a reported versus non-GAAP adjusted operating basis. In the fourth quarter, reported net income available to common shareholders was $44.8 million and earnings per common share were $0.59, down approximately $26.8 million or $0.35 per common share from the third quarter. The reported return on equity for the fourth quarter was 6.98%. The reported non-GAAP return on tangible common equity was 11.98%. The reported return on assets was 94 basis points and the reported efficiency ratio was 68.6% for the quarter. Non-GAAP adjusted operating earnings available to common shareholders in the fourth quarter were $53.8 million and adjusted operating earnings per common share was $0.71, which is down approximately $17.8 million or $0.23 per…

Thank you, Rob. And Michelle, we're ready for our first caller, please.

Thank you. [Operator Instructions]. And our first question comes from the line of Casey Whitman with Piper Sandler. Your line is open, please go ahead.

Good morning. I guess the first I'd ask is, some really nice loan growth towards the end of the quarter. Can you give us an idea for where new loan yields were coming on compared to the rest of the book?

I'm sorry, was that yields I had…

Yeah, the new, sorry, the new production that you guys put on towards the end of the quarter, what were the average yields on that production versus the rest of the book?

Yeah, the average. Yeah Casey, the average yields on commercial growth that we saw was in the range of about 3% or so. That's versus about 20% [ph] of the portfolio, existing portfolio. So we're seeing some declines there.

Okay. Maybe can you walk us through sort of how you're feeling about rate hikes and where you are positioned from an alcove perspective and sort of what sort of deposit betas you're assuming to get there?

Yeah, so in terms of the margin going forward here, as we now expect that we'll see the Fed Reserve move on the increasing Fed funds rates, could be as early as March, as some of the markets are indicating. Our baseline view for 2022 is that we'll see three rate hikes from the Fed, one in May, one in July, and another one in November. That said we would expect from a deposit beta perspective we don't expect to be moving rates higher, initially, probably won't see real movement on non-index deposit clients until we see going to the fourth and the fifth hike is our belief. So we won't see a lot of increase in terms of the deposit costs going forward, at least for this year. We do expect that margin will on a core basis will improve fairly significantly in the new year in 2022. We came out of the fourth quarter on a core basis. Now this is ex-PPP and accretion. Actually 0.8%, that includes about 11 basis points of excess liquidity impacts. We think -- we're putting that excess liquidity to work. We did a good job by the end of quarter. You'll see that in the first quarter. So we're looking at core margin to increase seven or eight basis points in the first quarter, and then ticking up as rates, as short-term rates increase starting in May and throughout the year that will end the year at around about a 310 or so core margin, again, not including the impacts of PPP, which are really coming down fairly significantly as we in the new year. We only have $4 million or so of deferred fees related to PPP, so that is not going to be any big impact at all this year. In terms of what's driving that is, I think if you see -- if you look in the deck, we do say that we've got about 45% of our loan book is tied to one-month LIBOR and prime rates and those will move fairly immediately to any heights from the Fed funds perspective and assuming LIBOR follow suit which we expect that will happen.

Okay. Thank you. Helpful. I'll just ask one on expenses, kind of hard -- you've got a lot of moving parts this quarter, I know. I mean, what is sort of this starting run rate that we should work the 2% guide that you guys just gave for 2022, I'm assuming it's a little bit higher than the 95 million to 96 million that you were running at just as a starting, that would be helpful?

Yeah Casey, so if you take in, if you look at our core, obviously the reported number is quite high. We've had the restructuring charges, but we also had a number of fairly unusual items that we would back out and not consider in our core run rate. Some of the commentary that I mentioned, if you back those out plus an elevated incentive accrual this quarter, if you back those out we think we're at around my feeling is we're at about a $96 million or so run rate coming out of the quarter. We are still guiding to be in about 2% growth off of that loan rate. So full year we are looking for anywhere between 385 million to 390 million is what we're looking at in terms of full year expense going forward. Hey Rob, can you speak to what will happen in Q1, there's still some residual expenses and timing issues on the branch consolidation and the operation center?

Yeah, as I mentioned in my prepared comments, we're going to have about $5.7 million of additional restructuring costs related to the branch closures, the 16 branch closures that will take place in March. And then of course, if you look at on a quarterly basis, we do have up tips in the first quarter primarily due to payroll tax resets, etcetera. So that would be the highest -- higher quarter and it will come down. So, as you go into second quarter, third and fourth, you'll see the impacts of those costs, of those actions taken on the cost of about $2 million a quarter going forward.

Casey, we acknowledge it's hard from the outside looking in to get clear line of sight to the run rate of expenses. We were very busy in December. We admittedly purposefully cleared the decks to take care of some things that needed to be taken care of. But we do think that the run rate is 96 million for the quarter on sort of a clean basis around or about. And when we talk about 2% growth rate on that baseline, that does assume the incentive plan is fully funded.

Okay. Alright, so the 385 million to 390 million guide does not include I would assume the 5.7 million?

Yeah, that's right Casey, yeah excludes that.

But it would include everything else, including like the amortization of intangible assets...?

Yeah, it includes the amortization and everything else, except that 5.7 million.

Okay, helpful. I'll let someone else jump on, thank you.

Thank you, Casey. And Michelle we are ready for our next caller, please.

And our next question comes from the line of Catherine Mealor with KBW. Your line is open, please go ahead.

Hi Catherine, good morning.

Good morning. Remember last quarter you gave a core NII ex-PPP guide of about 5% to 6% for this year. How are you thinking about that number now that we've got some rate hikes in your assumptions?

Yeah. So if you exclude the PPP and accretion, well just PPP we're looking at about a 7.5% to 8% growth rate on the net interest income line this year, primarily related to putting that excess liquidity to work and higher rates and the rate increases I just mentioned.

Okay, great. And then the 7 to 8 bps in lower NIM that you're thinking about for next quarter, are you thinking it as a big change in your excess liquidity or is that generally on a fairly similar balance sheet although it's risk?

Say that again Catherine. Basically on a core basis we're noting that there will be an uptick from what this quarter is. So about 287 is what we looking at in Q1 2022 versus 280.

Oh good.

Yeah, so it is a positive.

I thought you were going down. Okay, that…

No, we're going up.

Okay, great. That's what I was trying to figure out. Okay, so reported maybe it is going down, but…

Yeah. Reported we will be going down. Reported we will go down because, yeah, PPP will be out of the equation to the level we had in the fourth quarter.

Got it. Okay, that makes a lot more sense. And so you would assume within that some of the excess cash you had this quarter comes off as we move into next quarter?

Yeah, that's right. A lot of that excess cash did come off in December. You can't see it in the averages but you'll see that coming off as we funded -- had strong fundings of loans in December. And we also put some of that money to work in the investment security portfolio as well. But yeah, that's going to come down fairly -- in a fairly large manner. We still think we're going to have -- we still think we are going to have four or five basis points of impact from excess liquidity, but that's down from the 11 basis point we see in the current quarter.

Okay, great. And then one more if I could on fees, I was surprised to see service charges up, which is -- there's been a lot of conversations in the industry about that having weaknesses with overdraft changes and any thoughts on what drove the service charges and any headwinds we might see in that line going forward?

Yeah. In terms of the uptick in the quarter, we did see that's typically a seasonal uptick on volumes, from the holiday season. So that's not unusual. And I'll ask John to comment on either of your -- I think your questions is what -- where we're going with potential adjustments to policies relating to overdrafts, etcetera.

That's right.

Yeah Catherine, I would say that really for the last year or two, we have made various changes on related to overdraft charges to make them more consumer friendly. We are obviously very carefully watching the dynamic going on in the industry. There will be more changes. We do have a plan. We are not ready to share that yet as we go through the -- I guess the final decision making process. But you can expect there's going to be, there will be pressure on overdraft charges. [Indiscernible] bank as a reminder is one the J.D. Power Retail Banking Customer Satisfaction Award in mid Atlantic for two out of last three years. So we do a good job for our retail customers. We're very customer focused and we do understand the changing value proposition of consumer checking and we'll be making some changes. So there will be pressure that will apply there and we'll have more to say about that shortly.

Okay, great. Thank you, John.

Thanks Catherine. Michelle, we're ready for our next caller, please.

Thank you. And our next question comes from the line of Brody Preston with Stephens, Inc. Your line is open, please go ahead.

Good morning.

Brody, how are you?

Doing well, doing well, hope you are doing well too. Hey, I guess I just wanted to just real quick circle back on expenses. So Rob, I've got you at about like 18.6 million or so in one-time expenses this quarter between the branch closure stuff, the severance stuff, and the vendor termination. So I've got your operating expense inclusive of amortization of intangibles at about a $101 million. And so the higher end of the guidance that you put out of the 390 implies about 97.5 million and so if we're building off of a base of 101 into the first quarter with some higher payroll tax stuff, and then you've got the branch closures that come in, in the second quarter taking 2 million out, I can get you down to like another -- like back to 99 to a 100 pretty easily. So where's the rest of the $2 million to $3 million delta coming that get you down to that kind in 97.5 quarterly run rate on average?

Yeah. So Brody as I mentioned, our view is that the run rate is the adjusted core run rate that we'd be looking at is about 96 for the quarter. I think, if you look at the 120 million we reported you back off the 16.5 million you're down to about 103 million. And then you take out the various items I ticked off in my comments, just that we don't feel like we'll persist, those would be relating to the contract termination, severance, and some cost related strategic projects that won't recur. And then the other component is bringing that down would be the incentive accruals that we put through, those were inflated by about 3.9 million or so. So back that out and you get close to that number that I'm referring to. Now that performance incentive, we'll have to find its way back into the run rate because it basically was a pickup. As we are coming out of the third quarter, we thought we wouldn't have that level of incentive payout but we had a strong forward quarter. So we had to catch up. Interestingly Brody, if you look at salary and benefit excluding the incentive topping off, if you want to call it that, it was pretty much even quarter-over-quarter and that's ahead of the actions that are coming with branch consolidation, etcetera. So, we feel that we have a clear line of sight to be able to manage the 2% expense growth off of that $96 millionish base, assuming incentives are fully funded.

Got it. Okay. Thank you for clarifying some of it for me. On the growth run, I just wanted to circle back maybe to core C&I, and other commercial, they were both extremely strong this quarter. And so I wanted to ask if some of that was utilization rates ticking higher or was it purely new client acquisition? And then in the other commercial, could you speak to maybe the strength you saw in equipment finance this quarter?

Sure. David Ring, Head of Commercial Banking is here with me, wholesale banking as we now call it. I'll ask him to comment on this, but I'll set it up. We did see encouragingly commercial line utilization tick up in every single month of Q4, but the reality is it was still pretty minimal. So 28% is still about as low as you can imagine. So it was not on the back. We weren't fighting declining utilization for a change. That's good, but that's not really what lifted the boat. I think that we had really good performance production in Q4, was the best that I've seen production. It was back-end loaded. December production was thunderous and it was really a busy month for us. Equipment finance is performing well. Leasing shows up in the other commercial category, which you'll see on the balance sheet reporting and we were really strong across all categories, and certainly C&I was the headliner. Dave Ring, do you wish to comment on what we saw happen in Q4.

Sure John. Like you said, we had a record production for the quarter. We had higher pay downs, but we clearly more than offset it with C&I and equipment finance. Real estate was pretty flat for the quarter. So most if not all of the growth came out of the C&I and equipment finance groups. And when I think about the coiling spring, as we've referred to it a few times, yeah, it's their waiting commercial line utilization presumably has nowhere to go but up. From here, I think we're off the bottom and it inflected that'll grow with working capital needs and sales, watch construction lending even though you saw that take down a little bit. That's simply because projects completed rolled into permanent mortgage categories. We can see the construction funding commitments, we can see the funding schedules that should be a headwind for the year. We look at our pipelines, they're far better than they were this time next year and despite the tremendous production in Q4, they're actually in quite good shape right now. So feel like we should be on a growth footing, a solid growth footing at this point in time. You couple that with our asset sensitivity and I think that -- and our expense reduction actions, we are in a good position, we are exactly where we need to be, we just need to execute.

On the securities portfolio, if I can just ask for two stats maybe have what the duration of the portfolio is and then do you have what percent of the portfolio is floating rate?

Yeah, Brody the duration is approximately five years. I don't have exactly what the floating rate component is so I'll have to come back to you on that but it's relatively low. I just don't have the number in front of me here.

Got it, okay. And if I could sneak one more, the reserve for unfunded commitments, it looked like it stayed pretty flattish and so it was like a 7% increase, maybe in the dollar amount, but it was flattish as a percent of loan. So is it fair to assume that the unfunded commitments increased about 7% as well quarter-over-quarter?

Yeah, that's right. Actually, I think it increased about 0.5 million to 7.5. I think it's at 8 million now.

Yeah. Thank you very much.

Thanks Brody. Michelle we are ready for our next caller please.

Thank you. And our next question comes from the line of David Bishop with Seaport Research. Your line is open, please go ahead.

Good morning, David.

Good morning, gentlemen. Most of my questions have been asked and answered. But just curious, your view of excess liquidity in cash, I saw you put some to work there at the end of the quarter, the cash about 800 million, just where you see that potentially settling into over the course of the year?

Yeah, for the most part we're looking at that excess liquidity put into the loan book and the loan growth. We have increased our investment portfolio over the quarter. We're now I think we're up about 300 million quarter-to-quarter in terms of the investment portfolio, we're about 21% of total assets in investment portfolio, and putting that to work in mortgage backed securities and municipals in a 60:40 kind of going -- percentage of 60% mortgage backed and 40% monies. And we're putting those on at a blended rate of about 2.2%. But I don't think you'll be seeing that security portfolio continue to increase, it will probably come down over time for the maturities. But we want to use that excess liquidity into the loan growth that we're envisioning, occurring here in first as well throughout the year, basically.

Got it. And then one final question maybe on an dollar basis. Just curious if you have the dollar amount of the loan pipeline at year end versus last quarter? Thanks.

Yes, so at the end of the year, the pipeline was around 2.2 billion which was up fairly -- compared to last year count it was up roughly 650 million. Not everything is going to close when we can get into the details behind that. But we're consistent in terms of how we view it. This is part of why we're bullish and feeling confident about our ability to deliver on high single digit loan growth.

Great, thank you.

Thanks David. And Michelle we are ready for our next caller please.

Our next question comes from the line of Laurie Hunsicker with Compass Point. Your line is open, please go ahead.

Hi Laurie, good morning.

Good morning. I just wanted to go back on expenses. On Slide 12 you are break it out really nicely. Just want to make sure I'm understanding this right, the 4.4 million increase in salary and benefits obviously broke that out 3.9 plus the 500 contribution to ESOP. So are you suggesting that 3.9 is non-recurring?

No, what I'm suggesting Laurie is that gets fed back over on a quarterly basis as opposed to the hit, the increase in the quarter. So typically, we'd be accruing for incentives evenly throughout the year, depending on what our outlook is for the year. Through third quarter, we did not think the performance was going to end the year where it did. And so we had not accrued as much that was needed by the end of the year based on the performance of the fourth quarter.

Yes, as I think about my five years here, we generally have done a pretty good job in terms of estimating incentives so that we aren't really subjected to these year-end top offs. The fact is, we've done -- we have not done as good a job last year, and this year, just due to the environment. We're pretty conservative, it's been very difficult to predict, and I think that what Rob is saying is we'll simply have it spread out more evenly this year, because I think we're going to be able to forecast with more confidence.

Yeah, that's right Laurie.

Okay, and then just to clarify your 96 million run rate, because I think unlike Brody, my math somehow is higher, your 96 million run rate includes the incentive accrual fully baked into it, is that correct?

Yes, that's right. That 96 million as I mentioned, we were expecting a couple of percent growth rate on that. So that's, but you're right, it's fully baked in that number.

Got it, okay. And so when we think about 96 million, obviously, first quarter is elevated by the 5.7 million of branch closures plus you have the FICO that hits in that first quarter. So when we think about sort of the June quarter starting run rate, we're 96 million plus the 2% growth rate annualized as we go forward into 2022, is that right?

Yeah. But again, it's not evenly -- the first quarter is going to be much higher than you'll see in the second, third, and fourth quarter. But yeah, that's basically right.

Yeah. First quarter is always seasonally high for tax purposes as you know, Laurie. And again, as a reminder, not all we have $8 million of costs identified, they're coming out of the system as a result of branch restructuring, the closure of the Ruther Glen Center, that kicks in really, it takes into Q2.

Okay, okay, right. That 2 million run rate savings. Okay, and then just remind me your payroll taxes are about $2 million or do you have a better number on that?

Say that again Laurie, just that one.

The payroll taxes at FICO, how much of that…

The payroll FICO tax is $2 million, is that your question Laurie?

Yeah.

How much is FICA tax. I was just like, for this quarter…

I can follow up with you offline, because…

Yeah, that is right. I have the number, just wanted…

Okay. Yeah. Just two more questions. And so as we think about 2023 expenses because I think most of us are modeling our price targets off of 2023. How should we be thinking about expense growth in 2023?

Yeah, as we project forward in our three year forecast, we're looking at above 4% growth rate in expenses. Of course that could change depending on the environment where revenue is going, etc. But as we see a rising rate environment in where we are, with inflation, etc. we're looking at about 4%. Now, if you look at the 2022 numbers, I think we'd be in a 4% or so increase, if not for the cost actions, reduction actions we took. So fairly consistent going forward as well.

Yeah, I agree. And again, we should be in an improving revenue growth environment. At long last, we will be a beneficiary of a rising rate environment and I think we're well set up for that. But it's all about operating levers Laurie, we will continue to manage expenses to do what needs to be done.

Okay, great. And then one last question, just looking for clarity on the BOLI. I know it increased 559,000. Was that the debt [ph] benefit or do you have the total of the debt benefit, I think I missed that in your comments? Thanks.

Yeah, the BOLI benefit there was about 500, little over 500 for the quarter. So back that out and that will give you the normal run rate.

Right. Thanks for taking my questions.

Thank you Laurie.

And Michelle, we are ready for our last caller please.

Thank you. And our last question comes from the line of William Wallace with Raymond James. Your line is open, please go ahead.

Hi Wally, good morning.

Thank you, good morning to you. Maybe just real quick for David, we talked about line utilization. What was line utilization pre-COVID and are you guys modeling for increases in your high single digit guide for the year?

Well, it's a little hard to say because of the growth of the banks, and its changing complexion. But low 40s is I think the fourth quarter before COVID was at 38%. It sounds like…

That's right, it was 38 and now it's 28.

And we thought that was a little low back then, right away. [Multiple Speakers]. I do predict that businesses, as we've seen after various shops before will run with more liquidity. So maybe line utilization will be lower structurally than it used to be, but it is not going to be 28%. I mean, that's sitting there waiting on and then the ability to fill jobs, to go to sales, etc, etc. So there's upside there.

Yeah, there's about 25 million of upside for every percentage point.

Okay. And are you guys modeling for increased utilization in 2022 for your guide?

No, no, we're not. That'll be upside.

Great. John, in your prepared remarks you gave three kind of longer term goals and the third one was, I believe you said M&A as a tertiary strategy and then I think you said under the right circumstances, could you provide some commentary on what the right circumstance is for…?

Yeah Wally, thanks. I have been here for over five years now and if you look at the two that we've done, which were really instrumental to the creation of the bank as we know it today, and arguably on a combined basis for transformational, what did they have in common, there was no question about their strategic fit, there was no question about the financial aspects of the deal. And they made perfect sense and they were clearly signaled. So, how do we think about this, we don't even think about anything that does not make strategic sense and that financially would make sense. But you really get into kind of four big issues, one execution risk. How confident are we that we can pull it off well. Two, what is the opportunity cost, exactly what is not going to happen if we put the resources on that type of opportunity, cultural fit, and then one that we've really come to better understand is what I'll call differences in strategy. It is we can be more accommodating, where we don't have perfect alignment on these issues for smaller deals. But you can't really accommodate differences if you thought about something larger. And so while I think you're the -- what's changed our mindset is we're on a strong organic footing. We will be a beneficiary of rising rates. We're watching what is happening in the industry with the rise of financial technology. And we do intend to participate in that. So from our standpoint, it's an option we want to preserve it. I'm not saying we won't do it. It is more likely than not that if we pursued it, it would be something smaller. I will tell you, we did give thoughtful consideration to a larger scale accommodation last year, and we concluded it did not make sense for us. It just didn't pass the test of execution risk, opportunity cost, cultural fit and differences in strategy. And so you notice we haven't done anything. And quite candidly, a year ago, when we thought we would be in a zero rate environment for many years to come, that seemed more compelling than it does now. So that's how we think about it. Not saying we will, not saying we won't, but anything we did if we did anything wouldn't surprise you. I think we've got the track record to back that up.

Okay, thank you for that, John. And then just two quick follow up questions. I believe, David -- John said that the pipeline was 2.2 billion at the end of the year from 650 million, was that 650 million at the third quarter or at the end of last year?

That'd be compared to year-over-year.

Okay. And then Rob -- just go ahead.

So yes, going into 2021 versus going into 2020 is what Dave was referring to.

Okay, thanks. Okay, and then Rob, just I appreciate all the commentary around your net interest margin and your timing of rate hikes. But just so I don't have to do the mental gymnastics of figuring out what the timing difference in our models might be around when we're modeling heights, can you just kind of boil it all down and give what your expectation of margin expansion would be per 25 basis point Fed height?

Yeah, so for 25 bps we're looking at about eight to nine basis points of margin expansion.

Okay, great. And then I don't know if we're out of time or not, but if we're not, John, I'd love if you could talk about any Fintech partnerships, like how close you might be or how you're kind of thinking about building those partnerships to drive fee income? Thanks.

Yes, while we intend to do an Investor Day in May and we'll take you into a deep dive on that and really the rest of our various strategies, as a reminder, we were one of the initial investors in the canopy fund, and that Rob going from memory would have been 2019 timeframe.

Yeah, that's right.

So we have been leveraging that and other mechanisms to really whet financial technology partnerships. Thus far, I would generally characterize the types of financial technology partnerships that we've engaged in as providing services and products that complement the existing lines of business, product base, etc. Think of it as features and functionality for mobile banking, online banking, and back end processes as well. And we can give you lots of examples of that. Land would be an example, which we use our mortgage company, we learned about that through the seat we have at the table. When we talk about these funds, I want to be clear. We don't think of these as financial investments per se. Yes, they're financial investments and guess we've been successful. But, the real reason why we're interested in it is it allows us to build relationships as I said in my comments to look at a carefully screened and whetted set, and to really gain insight. So it informs our strategy, what will happen next is that we are really interested in the opportunity to build what I would call new business lines potentially. And we see block chain as something that is potentially very disruptive to existing payment mechanisms. So there are coming real time payment networks that could potentially underscore potentially render ACH Fed Wire, Zell things like that obsolete. We do not want to be a late adopter on it and so we're interested in categorically, especially in payment networks and what I would call back office applications, the ability to go from start to finish on a home equity line in five days. Could be a possibility. So we don't want to get ahead of ourselves on this Wally. But what we're seeing is we're now moving this to the next level, and we've invested in other funds to expand our network of partnerships. We're not going to do anything, I think that would surprise you. We don't have any current intentions at this moment for engaging and what I would call store value concepts, which is like be a gateway to Bitcoin. I'm not saying we will not do that but I'm simply saying that we are especially focused on emerging payment networks and block chain as a technology to vastly improve backend processes. We'll see where it goes from here.

Okay, great. Thank you so much. Appreciate your time guys.

Sure. Thanks Wally. And thanks everyone for joining us today. We look forward to talking with you next quarter. Have a good day. Thank you.

This concludes today's conference. Thank you for participating. You may now disconnect.