UMB Financial Corp
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UMB Financial Corp
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Good morning and welcome to the UMB Financial Fourth Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Kay Gregory of Investor Relations. Please go ahead.
Welcome, and thank you for joining us. On the call today are Mariner Kemper, President and CEO; and Ram Shankar, CFO. Jim Rine, President and CEO of UMB Bank, will be available for the 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. Actual results and other future circumstances or aspirations may differ from those set forth in any forward-looking statement. Details about factors that may cause them to differ is contained in our SEC filings. Forward-looking statements made speak only as of today and we undertake no obligation to update them, except to the extent required by applicable security laws.
Our earnings materials are available on our website at umbfinancial.com in the Investors section. Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measures have been included in the release and on Slides 39 and 40 of the supporting materials. All earnings per share metrics discussed on this call are on a diluted share basis.
Now, I'll turn the call over to Mariner Kemper.
Thank you, Kay, and thanks, everyone, for your interest in UMB. As you've seen in our press release, our results for the fourth quarter were significantly impacted by the charge-off of a single $48.1 million factoring relationship. Strong asset quality has long been a hallmark of UMB, and this has been – was not expected and is certainly not typical for us. After a thorough review, we believe that the issues specific to this credit were isolated, and we don't believe that this charge-off points to deterioration in any particular sector.
Our loan portfolio remains diversified, and we have seen improvements in overall quality. In fact, outside of this credit event, we would have reported outstanding asset quality, including net recoveries, which can be summarized from the chart on Slide 18, showing net charge-offs of $45.7 million for the fourth quarter. I'm sure you'll understand that because of ongoing legal proceedings, we may not able to answer all your questions related to this credit.
I can share that this was a ranked credit as of September 30, and after being placed in receivership in the fourth quarter of 2018, the customer filed for bankruptcy protection in January. Based on third-party bids that we obtained under the receivership, we determined to fully charge off the credit for accounting purposes. But we intend to fully pursue our rights, both within and outside the bankruptcy proceedings. In our history, as we've analyzed our relatively few credit losses, we found that most of them have involved some deviation from our processes or a failure to receive timely, accurate information and, more often than not, were unrelated to underwriting issues. We believe our underwriting standards and processes remain strong.
Again, while we believe that this is an isolated incident, it's understandably the headline for the quarter. On a personal note, I'm deeply disappointed with the result that doesn't live up to the standards we set for ourselves as excellent risk managers. We will use this event as an opportunity to learn and improve. Aside from the charge-off, the fourth quarter was solid, with linked quarter results, including 8.5% annualized loan growth, 9.9% average deposit growth and margin expansion of 6 basis points.
Average loans increased 2.1% versus the third quarter or 8.5% on a linked quarter annualized basis compared to 5.6% for the industry, according to H.8 data. Top line loan production was again very strong, coming in at $709 million for the quarter. C&I was the biggest contributor to our growth this quarter while CRE balances remained relatively flat, impacted by the payoffs and paydowns at year-end. Top region for loan growth was Kansas City, followed by Texas and Colorado.
Total payoffs and paydowns this quarter represented 4.6% of loans. As we mentioned last quarter, we expected payoffs and paydowns to reset slightly higher, and this level is similar to our long-term quarterly averages. Looking ahead at the first quarter, our pipeline outlook remains strong, similar to what we saw going into the fourth quarter. Net interest income grew 7.5% compared to the third quarter, fueled by loan volume and the impact of rising asset yields, which more than offset increased funding costs.
Net interest margin for the quarter was 3.24% or a 6 basis point increase. The expected drag from a full quarter of the promotional deposit balances and the excess liquidity we continue to carry was mitigated by loan growth and favorable repricing, decreased wholesale borrowing levels and higher DDA balances. Ram will provide more detail into these metrics in a few minutes.
Expenses for the quarter increased 2.2% compared to the third quarter and on an operating basis, increased 0.8%. As we repeat each quarter, we are focused on our operating leverage over the long term, and you should expect that to continue. For the full year of 2018, we generated positive operating leverage of 1.9%. Finally, you'll recall that we announced an accelerated stock repurchase agreement for approximately $50 million of our outstanding shares. That agreement was completed in December. We repurchased approximately 780,000 shares during the fourth quarter. Our priorities for capital remain organic loan growth, potentially augmented by bank M&A; continued interest in consolidating opportunities in our fee businesses; periodic dividend increases; and the opportunistic use of share buyback authorization, including the potential for future accelerated share repurchases.
Now I'll turn it back over to Ram for a more detailed discussion of our drivers behind the results. Ram?
Thanks, Mariner. For the fourth quarter, net interest income was $161.8 million, representing a 7.5% increase on a linked-quarter basis. The positive impacts of our strong loan growth and rate increases, along with deposit mix shift, more than offset the additional money market interest expense related to our third quarter deposit campaign.
Our earning asset beta for the quarter outpaced that of total funding, and cycle-to-date, our earning asset yield has expanded by 125 basis points to 4.03% for a 62% cumulative asset beta. During the same period, our total cost of funds rose 70 basis points from 0.13% to 0.83% for a 34% cumulative beta.
Unlike third quarter, fourth quarter LIBOR rates behave more closely to their historical pattern moving ahead of the December rate hike. With approximately 38% of our loans tied to LIBOR, we saw a 24 basis point increase in loan yields compared to the third quarter. The average balance in our AFS Portfolio as shown on Slide 13, increased $242.2 million on a linked-quarter basis and the average yield increased 16 basis points to 2.37%. In addition to reinvesting roll off balances, which provided about 5 basis points of the increased yield, we purchased an additional $550 million at an average yield of 3.65% as some of our excess liquidity was deployed during the quarter.
The seasonal impact from public funds and institutional deposits drove the increases in fed funds sold and interest bearing due from bank levels. The yield on total earnings assets was 4.03%, an increase of 14 basis points from last quarter for a beta of 52%. On the liability side of the balance sheet, average total deposits increased 9.9% on a linked-quarter basis, led by the full quarter average impact of the money market campaign which occurred late in the third quarter and by increased DDA balances, partly due to typical seasonal build up of cash in our Corporate Trust business related to municipal bond distributions. Non-interest bearing deposits represented 33.3% of total average deposits for the fourth quarter.
Our deposit composition is shown on Slide 15. Commercial accounts represented the largest portion of our linked-quarter increase in interest bearing deposits, in money market and performance deposits, followed by consumer money market accounts. In our healthcare business, average deposit balances increased 4% compared to the third quarter and 20.6% year-over-year, as much of the cyclical growth in these balances occurs in the first quarter when accounts are funded following open enrollment at year-end.
During the quarter, our cost of deposit – interest-bearing deposits and the total cost of deposits increased 19 basis points and 13 basis points respectively, to 1.12% and 0.75%. Net interest margin for the quarter was 3.24%, up 6 basis points from the prior quarter. Margin was positively impacted by about 3 basis points related to loan volumes, 2 basis points related to higher rates, 3 basis points from the benefit of higher DDA balances, and 3 basis points from higher loan fees. The expected negative impact of our excess liquidity was a drag of approximately 5 basis points. Our internal economic forecasts and the outlook we contribute to Bloomberg has just one rate hike in June 2019. We are lengthening our portfolio duration, while still building some liquidity on the short-end to help mitigate the impact of a flatter curve.
Moving back to the income statement, slides 22 through 25, show the composition and drivers of our non-interest income, which was $95 million for the fourth quarter. The decrease from the third quarter was largely due to a $5.7 million reduction in company-owned life insurance income related to market valuation adjustments. This has an offset in deferred comp expenses in salaries and benefits expense. Additionally, we posted a $1.3 million decrease in derivative fees related to back-to-back swaps after an upward swing in the prior quarter. These decreases were partially offset by $2.9 million in gains on sale of assets and about 900,000 in loss recoveries.
Our Corporate Trust team continues to show strong performance posting their best month ever in December. All our new and legacy offices are contributing to new business growth, and the related revenue included in trust and securities processing income increased 9% compared to the third quarter. Overall, trust and securities processing income was negatively impacted in part due to market conditions and lower fees in our alternative asset servicing business.
Slide 26 contains detailed drivers of the quarterly changes in non-interest expense. Salaries and benefits expense increased $1 million compared to the third quarter and included the severance expense shown in our reconciliation table. The increase was also impacted by one additional business day during the quarter and was partially offset by the decrease in deferred comp expense I mentioned earlier.
Other non-interest expense increased $1.8 million and included a $900,000 contribution made to the UMBFC Charitable Foundation and an increase of $700,000 in derivative expense. Finally, legal and consulting expense rose compared to the third quarter related to the ongoing investments we've discussed in the previous quarters. These expenses can be lumpy and there may be timing related variances quarter-to-quarter.
Finally, our effective tax rate was 12.2% for the full year of 2018. During the quarter, we recognized approximately $4 million in provision to return adjustments, which lowered our effective tax rate for the quarter. For the full year 2019, we expect our tax rate to range between 16% and 18%.
Our segment results are included in the press release and additional details on each of them begins at Slide 28. In the interest of time, I won't cover those here, but we'll be happy to take your questions. That concludes our prepared remarks and now turn I'll it back over to the operator to begin the Q&A portion of the call.
We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Jared Shaw of Wells Fargo Securities. Please go ahead.
Hi good morning.
Good morning Jared.
Maybe if we can start with the HSA trends and what you're seeing for the pipeline as we – as you go into first quarter. Obviously, with the enrollment cycle behind us now, can you give us any trends in terms of account growth or deposit growth that you're seeing there?
Sure. Jared, this is Mariner. I'm going to start by making some overall comments real quick for everybody because we have had lots of email traffic and text traffic while the call was going on. I want to make – apologize to everybody. It sounds like we've had some technical difficulties. We're looking into what happened, but I don't know whether it's weather related or our phone vendors or whatever it might be, but there was some static and there's some bandwidth issues, et cetera. I want to apologize in advance to anybody who has missed any of this and remind everybody that this will – our call will be posted on our website and you can certainly find it later. And I will also be making myself available to our analysts and investor community throughout the day as well. So I just want to apologize in advance for everybody who's on the call who may have been experiencing some technical difficulties.
With that, I'll jump into Jared's question. So thanks for the question. I'm going to make a make a couple of comments and then ask Jim Rine to jump in. But the HSA business is on track as it is seasonally. The fourth quarter is typically when the enrollment season takes place and you see those results ultimately in the first and second quarter. So all indications are that we've had a strong enrollment season, as we've had in the past, and so the pipeline remains strong. And I think that mostly answers your question. I don't know, Jim, if you want to add anything to that.
I would just say that, as you know, our – we operate under a wholesale model primarily and a lot of our competitors have a direct model. But there've been comments regarding pressure for yield, but we have not really seen that, especially in the direct model. We'll also model – the majority of the accounts come in at year-end and we're still tabulating those. But we're still seeing growth in the business and we're still continuing to invest.
Okay, thanks. And then on the factoring line, I understand there's a lot you can't say yet. But can you – is this in the transportation factoring side? And when you look at the average balances for factoring in the quarter, they were still outside of this charge-off happening at quarter end. And I guess, what's your appetite for growing that line from here?
This is Mariner. Thanks for that question. I would say that, so first of all, our factoring business combines anything in transportation along with any other commercial finance opportunities that would come about through the sales efforts for our factoring business. And we did not distinguish in our remarks for the reasons you mentioned because of the proceedings are taking place, can't go into the details about a particular credit related, what industry it's in, et cetera, but it is an isolated event, as I said in my prepared remarks. The issues related to this credit or isolated to this credit and we don't expect to see any other challenges within the factoring portfolio.
As far as factoring, we love the business. We're a commercial bank and factoring, asset based lending, mezzanine lending, et cetera, it's a full suite of products for providing services to a middle market company. So we love the business. We expect to continue to invest in the business. We have lessons learned. We've lessons that we've learned here and then we will get stronger and focus on improvements, but still very excited about the business.
And Jared, this is Ram. Just to add to your question. You're right, the charge-off was on 12/31, so the averages are not as much impacted by the charge-off in the fourth quarter.
Okay. And are there any deposits associated with the factoring customers or clients or is that really a specific loan product, generally?
It's not much. There are some, but given the fact that's a national business, we are successful in some cases, but not in all cases.
Okay. Thank you.
Our next question is from Chris McGratty of KBW. Please go ahead.
Hey, good morning. Thanks for the question. If I go back to the charge-off in the quarter, the $48 million on the end of period of $262 million, it's pretty concentrated exposure. Maybe could you speak to and I believe these are very short term loans. Can you speak to the granularity of this portfolio? It seems a little atypical of the bank to be in these kind of larger credits.
And then also while you're talking about that, I don't have a ton of knowledge on the factoring business in the nuances, but it seems like a 100% loss would seem something unusual given the collaterals usually associated. Any kind of comments would be great. Thanks.
Yes, thank you. This loan is significantly larger than the next largest loan in that portfolio. So it's an unusually sized loan in the book, but it would not be unusual for us to approve a larger loan, because it's really as you understand how the factoring business works, it's really about the debtor and the receivables, each line is really set up so that you can approve really at the debtor level or receivable amounts and you're buying receivables and ultimately looking through to the debtor. And in most cases, in factoring, you're looking through the Fortune 500 companies or large companies like that that you're not really looking to the credit of the Company ultimately, it's how the business works. So – yeah, go ahead.
Yeah, sorry, Mariner. Looking at your slide deck when you bought Marquette in 2015 and it was about $100 million portfolio and it's around – it's roughly tripled. So big, big growth. I'm wondering if you could speak to, kind of, did it grow perhaps in hindsight a little bit too quickly, but also the loss rates that the historical Marquette had were very low. And so, I just, I guess I'm struggling with how does it become a 100% loss?
Sure, sure. So the first answer to your question about how you go from what would have been smaller loan sizes prior to us acquiring business and then doing loans of this size really comes to what the power of us acquiring the company meant, which is that, our legal lending limits, our capital, really allowed us to make larger loans.
So that was the intent from the beginning. Ultimately, it was to the power of the combination of our companies was to allow us to use our capital, use our deposits, use our legal lending limit to actually allow us to grow the business. So we knew and expected and desired to grow the business faster than they were growing it and that is exactly what happened.
The second, what was your second question?
Yeah, just on the way the lending relationship works, 100% loss.
Yeah, so it would be incredibly unusual for us to have a 100% loss and that kind of gets into the part which I'm unfortunately can't give you a whole lot more detail given where we are. We kind of cover that in remarks about how far we can go in details, given the fact that we are in the middle of pursuing remedy. So we can't really talk a whole lot more about that. What I would say, just very specifically is that the issues that caused this, as I said in my remarks, are 100% isolated to this credit.
Okay. Maybe I'll follow-up offline. If I could just pivot to the buyback for a minute, you are pretty active at the $50 million and I think you have around 1.3 million shares left, 1.2 million, does this at all – just kind of discovery and kind of the control review? Does this at all pivot in terms of capital return? And I was a little bit surprised to say – to hear you say a met bank M&A is still a priority and maybe you could just talk about capital distribution if you have a minute. Thanks.
Yes, I mean, I think as I said in my remarks, we continue to evaluate all of the uses of capital and I think it would still be obvious to best use of capital at the top of this, of your choice is just to reinvest in your business. And so we continue to always be evaluating those things. And I think that the point about maintaining our focus on M&A is that, this is an isolated event and we certainly plan to continue to invest in our business and look for opportunities to grow and build our business.
Great. Thanks a lot.
Our next question comes from Matt Olney of Stephens. Please go ahead.
Good morning, Matt.
Hey, good morning. This is actually Brandon Steverson on for Matt this morning. Good morning, guys.
Good morning.
Good morning.
I know that you said, this is a 100% isolated, and there's not too much that you can go into on the side of the borrower. Can you give us some more details around the controls breakdown and what control should have been in place that maybe did not remedy the situation? Thanks.
Unfortunately, sorry. No, I think I understand the spirit of the question, but given the proceedings and again pursuit of remedy, et cetera, I can't really go into that in a public setting.
Okay, fair enough. Could you just tell us how big was the line before it got over what the max should have been?
Well, I don't know that's – I mean, it got to 48 and we charge the whole thing off. It got up to $48.1 million and we charged the whole thing off.
Okay, alright. Thanks, guys. That's all from me.
Our next question is from Nathan Race of Piper Jaffray. Please go ahead.
Hey, guys, good morning.
Hey, Nathan.
Coming back to the loan growth discussion, you guys obviously put on good growth this year, 8% year-over-year, up from 7% last year. So just curious, just given the credit that we had this quarter, I mean, how you guys are thinking about loan growth. Obviously payoffs were little higher here in the fourth quarter than what we've seen last few quarters and paydowns as well. So just curious, kind of, how you guys are feeling about loan growth and pipelines heading into 2019?
Sure. Well, first, I would start by saying the credit event and our loan growth are not connected. So we plan to certainly continue to grow our loans at the highest cliff that we can without taking risk we wouldn't take otherwise. So nothing has changed about how we're pursuing growth. In the last quarter's call, we talked about the fact that we expected payoffs and paydowns to come up a little bit, and that's what's happened. So the payoff levels, payoff/paydown levels that you saw in the fourth quarter are what we believe to be more normal for us.
And outside of that, I'd say loan growth we've seen in the pipeline is good. The teams are having good success. And, Jim, do you want to add to that?
Yes. Nate, this is Jim Rine. I would just say that in the markets where we already are and we've established a foothold, we have room to grow in each market. You saw nice growth in our traditional C&I business, not just in real estate, and the loan pipeline looks good. And while we will continue to have payoffs, we feel like we're poised well in each market to continue what we've been doing.
Okay, that’s helpful, appreciate that. And Ram going back to your previous comments around the impact of prepayment fees on the margin, I think you said it was 3 to 4 basis points. Just curious kind of how that stacks up from – relative to the third quarter?
So the increase was about 3 basis points. I think we have 2 basis points. And they weren't prepayment fees necessarily. They were loan fees that we got, including in our specialty lending businesses, and there's also some purchase accounting from early payoffs that we saw. So probably about two last quarter, five this quarter, so that's the 3 basis point impact to margin benefit.
Okay, understood. And then just lastly just going back to the credit event in the fourth quarter. Just curious if there was any other deterioration that kind of ensued in the course of 2018 or if there was kind of more kind of abrupt event that occurred late in the year or in January here that kind of caused you guys to take the charge that you did here in the fourth quarter?
Sure. I – so first of all, I want to start off by saying we're obviously very disappointed in this result. We think there's lessons for us to be learned here. We will get stronger. We're going to use this as an opportunity, as we always have. One of the reasons that we've had the kind of credit history we have had over a long period of time is that when we do have a loss, the same team who's been overseeing the book sits down and looks at themselves in the mirror and figures out how to make our processes stronger, and that's one of the reasons we have the strongest books that we do over a long period of time.
So what I would point to is we will learn lessons from this. But I want to make a point that I think is pretty important that I made in my prepared remarks, which is if you look at our fourth quarter, Page 18 of our slide deck, you'll see that commercial loan charge-offs in total for the quarter ended up being $44 million. So you put that up against this $48 million charge. Can't do the math for you, but you can see that we would have been in a – outside of this credit at $48 million to have commercial charge-offs of $44 million for the quarter.
You can kind of back in to what the rest of the portfolio looks like. And that's the kind of quarter we were having outside of this event. And it was not an underwriting issue.
So if I'm hearing you right, Mariner, it sounds like there was kind of an issue that just occurred towards year-end or in January. It seemed like the credit was performing well through most of 2018.
Well, I'm not going to get into specifics about when exactly we started to see trouble, but it was at the end of the quarter when we decided to charge it off.
Understood, I appreciate all the color guys, thank you.
Yes.
[Operator Instructions] The next question will come from David Long of Raymond James. Please go ahead.
Hey David.
Good morning, everyone.
Good morning.
Good morning.
Ram, can you provide a little bit of color on the securities portfolio and extending duration there. Can you maybe extrapolate on that a little bit and let us know what had securities been rolling off on versus what if you've been putting them on it and what's the exchange in duration? What is it that you're buying today versus what you may have been looking at a year ago?
Yes, so the roll-off yield and we have a disclosure in our slide deck as well. If you look at the next quarter, the roll-off yield is going to be about 2.13%. We took advantage early in the fourth quarter in the first couple of months before the tenure came back down. So if you look at our new money yields for the fourth quarter, they were about 3.68%. If we buy the same portfolio, these are longer-dated CMOs and some DUS bonds, community portfolio as well, that purchase yield is probably dropped at 3.40% to 3.50% today.
Got it, got it. Excellent, thank you. And then secondly, looking at the expenses in our outlook for 2019, what do you expect the pace of IT spending to be this year and maybe – I know you've talked about some of this in the past. Can you remind us any specific, IT or infrastructure investments that are going on right now that you have planned for 2019?
We don't – we have not been giving straight up guidance about how much more and what exactly we're spending it on, but we've made some topline color comments about what we've been doing last year and what we're doing on through 2019 around making sure that we are investing in the business to make sure resiliency is where it needs to be and we're investing to make sure we keep up with our customer facing technology, et cetera.
So we've been making those investments to keep up with organizations that have big budget. So we've been doing what we need to do to stay competitive. So I know that's not what you're looking forward. What I would say is that we point – would like to point you back to operating leverage really being what we're focused on and committing to you would have positive operating leverage and not really committing to a specific run rate on our expenses.
Got it. Thank you. I appreciate that. That's all I have. Thanks.
Our next question comes from Ebrahim Poonawala of Bank of America Merrill Lynch. Please go ahead.
Hey, Ebrahim.
Hey, good morning. How are you?
Good.
Good morning.
I just had one question, Mariner. So I heard all your comments on credit, and you mentioned multiple times like lessons learned from this. Just so that we are clear in terms of the lessons learned, does that from our standpoint, should we take away that meaning that you're thoroughly reviewing internal processes, maybe personnel changes if needed as you apply some of those lessons learned or is the message that this was so isolated no one could have done much about it, so there is not something internally that needs to be done. I just want to be clear on that.
I will reiterate that it is isolated. Absolutely, our analysis reflects that it is isolated, so put a period on that one. As it relates to reviewing our processes, I'd say we're doing that all the time anyway and this is – certainly it gives us opportunity to look for – opportunity to tighten gets stronger and smarter. So we will do that as it relates to specifics about what we have done or will do.
Again, I can't really reflect on that, those specifics with you given the proceedings and our need to pursue remedy.
Understood. And do we extend to you again – I'm sorry if I missed this. Did you say a few things that there's any possibility that there could be a recovery on this at some point?
We are pursuing. We are absolutely pursuing that. I cannot tell you one way or the other whether we will be successful.
Got it. Thank you.
Our next question is a follow-up from Chris McGratty of KBW. Please go ahead.
Thanks. Thanks for the follow-up. Ram, on the tax rate, just want to be clear. Is that a FTE or that's a non-FTE, right, the 16% to 18%?
GAAP tax rate, 16% to 18%.
Okay. And then second, was there any adjustment to the expenses, either comp or incentive comp from the credit either in the fourth quarter or kind of prospectively that we should be kind of thinking about because of the credit issue?
Could you repeat that? I'm not sure.
Well, in terms of bonus of reversal or something, some sort of incentives that management was either the lender or the senior team that because of the credit once out, I assume there is a credit component of your incentive comp.
Sure. So, what you've seen in our financials for the fourth quarter is what you see for – I mean, those are our financials. And as it relates to incentives, our incentive program works appropriately to – our incentive programs work the way they're supposed to, related to how they incent people for their behaviors.
Okay. And then maybe finally the Trust business that you spoke about, kind of being soft with the market in December. How much of that Trust/Securities Processing line is kind of market driven versus kind of more recurring that's less volatile to the end to the market? Thanks.
Hey, just to be clear, Chris, we said Corporate Trust had a spectacular December, maybe even the best in its history. So I just want to make sure you understood what we said. The Trust and Security Processing as we said in our slide deck, there was a $1.5 million adjustment primarily in our alternative business. I would call that more of an accrual adjustment. So it's kind of one-time in nature. So that's why TSP line is down on a quarter-over-quarter basis.
But in terms of momentum in the Corporate Trust, I talked about the aviation business, we act as trustees, that's had a spectacular fourth quarter as well, which is why we saw a huge influx of DDA balances in the fourth quarter, which benefited our margin by about 3 basis points to 4 basis points.
Okay. Just sort of $1.5 million, Ram, that you call it, that's kind of the effective markets. Is that the way to think about it?
No, I would call it more as an accrual adjustment. The markets did have some headwinds especially if you look at the month of December. There is a component in multiple businesses whether it's wealth management or fund services that have a market component.
Okay. Thank you.
This concludes our question-and-answer session. I would like to turn the conference back over to Kay Gregory for any closing remarks.
Thank you for joining us today. This call can be accessed via replay at our website, and as always, you can contact UMB Investor Relations at 816-860-7106 with any follow-up questions. Again, we appreciate your interest and time. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.