UMB Financial Q4 2007 Earnings Call Transcript

Jan.23.08 | About: UMB Financial (UMBF)

UMB Financial Corp. (NASDAQ:UMBF)

Q4 2007 Earnings Call

January 23, 2008 9:30 am ET

Executives

Begonya Klumb - Director ofInvestor Relations

Mariner Kemper - Chairman and CEO

Peter deSilva - President and COO

Mike Hagedorn - CFO

Analysts

Peyton Green - FTN Midwest Securities

Operator

Welcome to the UMB fourth quarterEarnings Call. At this time, all participants are in a listen-only mode. Abrief question-and-answer session for analysts will follow the formalpresentation. (Operator Instructions).

It is now my pleasure tointroduce your host, Ms. Begonya Klumb, Director of Investor Relations. Thankyou. Ms. Klumb, you may begin.

Begonya Klumb

Good morning, everyone, and thankyou for joining us today for our conference call and webcast regarding our 2007fourth quarter and full year financial results.

Before we begin, let me remindyou that our comments in this conference call contain forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1944,Section 21E of the Securities Exchange Act of 1934 and within the meaning ofthe Private Securities Litigation Reform Act of 1995. Such forward-lookingstatements rely on a number of assumptions concerning future events and aresubject to risks and uncertainties, which could cause actual results to differmaterially from those indicated in our statements made during this call.

While management of UMB believesour assumptions are reasonable, UMB cautions that material changes in interestrates, the equity markets, general economic conditions as they relate to thecompany's loan and fee-based customers, competition in the financial servicesindustry and other risks and uncertainties, which are detailed in our filingswith the Securities and Exchange Commission, may cause actual results to differmaterially from those discussed in this call.

UMB has no duty to update suchstatements and undertakes no obligation to update or supplement forward-lookingstatements that become untrue because of new information, future events orotherwise.

By now, we hope most of you onthe phone or listening to the webcast have had a chance to review our fourthquarter and full year earnings release dated January 22nd. If not, you willfind it on our website at umb.com.

Our earnings release includesboth our GAAP-based income statement and a reconciliation to the non-GAAPmeasures discussed in the release and during this call, which includes certainpre-tax adjustments to non-interest income and non-interest expense, the taxeffect of those adjustments and adjusted net income. These adjustments comprisenet gains associated to the sale of the securities transfer product and aliability accrual related to Vista's coveredlitigation provision. The reconciliation for these items can also be found onour website at umb.com.

The non-GAAP results are asupplement to the financial statements based upon generally accepted accountingprinciples. UMB believes this non-GAAP presentation and the elimination ofthese items is useful in order to focus on what we deemed to be amore reliableindicator of ongoing operating performance.

On the call today are MarinerKemper, Chairman and Chief Executive Officer; Peter deSilva, President andChief Operating Officer; and Mike Hagedorn, our Chief Financial Officer.

The agenda for today's call is asfollows. First, Mariner will highlight our results and strategies. Then Mikewill review the details of our fourth quarter and full year results. Peter willfollow with a more detailed review of operating performance against ourstrategies. Following that, we'll be happy to answer your questions.

Now, I'll turn the call over toMariner Kemper.

Mariner Kemper

Thank you, Begonya. Welcomeeveryone and thank you for joining us today. Happy New Year to you all. As youhave seen in our press release, UMB delivered solid financial performancethroughout 2007. These results reflect disciplined execution against our growthstrategies, which we believe without changing our risk profile even at thecredit markets continue to suffer, a significant stress.

UMB achieved record net income in2007 of $74.2 million or a $1.77 per diluted share, up 26% from a $1.40reported in 2006. Our fourth quarter diluted EPS was $0.37 flat from the sameperiod in 2006. The fourth quarter results reflect the impact of a $4.6 millionpre-tax reported liability related to Vista'scovered litigation provision. Without this expense related to Vista,UMB would have reported net income of $17.8 million resulting in diluted EPS of$0.43 or a growth of 16.3% over 2006.

Our 2007 financial performancewas driven by double-digit non-interest income growth, which at nearly $289million was also a record for UMB. Net interest income improved as well mostlydue to a higher average earning assets and higher margin.

Our 2007 results demonstrate theoperating leverage we have been able to achieve as our team continues toeffectively implement our growth strategies, while maintaining our high creditquality standards. We achieved these results without comprising our traditionalstrong liquidity and asset quality. In 2008, we will continue to monitor theeconomy and manage our business the way we always have, for the long-term andnot just for the quarter.

Now I would like to discuss ourprogress against our company's strategies. Our first strategy is to focus onyield enhancement. We continue to make progress and optimizing the mix of ourearning assets and liabilities while growing the loan portfolio. In 2007, endof period loans increased 4% over 2006. The improvement reflects solidimprovement in our commercial, HELOC and credit card portfolios, offset by a26.4% or a $190.8 million decline in our indirect balances.

Commercial loans grew at 13.1%year-over-year as we continue to demonstrate our ability to leverage one of thestrongest parts of our franchise. We are also very pleased that we achievedthese results while maintaining our credit quality standards.

Credit card balances increased 17.2%year-over-year and 5.2% on a linked quarter basis. Credit cards remain an areaof focus for future growth in earning asset yield improvement. Peter will coverour credit card business in more detail during his remarks.

Home equity loans are up 47.8%year-over-year and now exceed $270 million in total balances. Home equity loansnow constitute 6.9% of our total loan portfolio. In addition to our branches,originations have come from our existing customer base, particularly in privatebanking and our commercial portfolio. Again this business has grown withoutcompromising our credit card quality standards.

Given the relatively small baseof our portfolio, as well as the low penetration within our retail customerbase, we are optimistic about the potential for this portfolio. As I mentionedpreviously, our indirect loan balances declined 26.4% in 2007. You may rememberlast quarter we made a decision to allow the indirect loan portfolio to run offas a part of an overarching strategy to improve earning asset yields.

As we continue to manage ourexisting indirect loan portfolio, we've not purchased any new contracts throughour dealer networks since August 31st, and at the end of 2007, our indirectportfolio had a balance of $531 million compared with $721 million at the endof 2006.

End of period deposits were up3.8%, an improvement of nearly $242 million over the end of the 2006, with thelargest increase coming from time deposits.

Growing core deposits remains achallenge for the entire industry. Still, a strong 32% of our deposits arenon-interest bearing, compared with the industry average of approximately 14%.Despite the declining rate environment, we are still seeing very aggressivepricing on our deposits within the industry. We will continue to monitor ourfunding needs as our indirect loan portfolio runs off. This runoff is expected toprovide more liquidity.

We believe we are in anadvantageous position based on our balance sheet and funding structure. We'vemanaged our funding costs as rates have declined, which has contributed to ourmargin improvement during the year. Our core investment portfolio's averagelife increased to 37 months at the end of 2007, up from 35.3 months a year ago.If rates continue to decline, some shortening of the core portfolio's averagelife could occur over the next year, since we plan to avoid locking in lowerrates for longer periods of time.

We are also improving yieldsthrough a better earning asset mix. While our indirect loan portfolio runs off,it is our intent to replace it with higher yielding loans such as commercial,credit card and HELOCs. Moreover, total average loans comprise 54.9% of runningasset base for 2007, compared to 53% for 2006.

Our second strategy is tocontinue growing our fee based businesses. Non-interest income increased 13.3%and represented 55.4% of total revenue in the fourth quarter. This improvementreflects continued growth in trust and securities processing income, anddeposit service charges. Peter will cover more detailed results of our feebased business in his comments.

The third strategy is to optimizeour distribution network, including continued investment in our retailbusiness. We closed two branches and opened one in the fourth quarter leavingus at a total of 135 branches as of December 31, 2007. Repositioning andincreasing utilization of our regional distribution network remains a priority.In both St. Louis and Denver we hired new leadership andsales-support to focus on asset management and corporate trust. These actionsalso play into our strategy to strengthen our asset management businesses.

We continue to strive for alarger presence throughout our footprint and especially in the e-markets. Ourfocus is to provide a broad offering of services through our existing branchnetwork.

Our fourth strategy is tocontinue to strengthen our asset management business. Trust and securitiesprocessing income increased more than 17.6% in 2007 to $115.6 million, from$98.3 million in the prior year. This is primarily due to the success of ourasset management business, which continues to be a key driver for UMB.

The improvement in performance inthe asset management business was largely due to the $873 million or 8.6%increase in total assets under management.

Finally, our fifth strategy is tofocus on capital management. Our priorities for this remain the same: Firstly,to invest in growth, either through reinvestment in businesses or throughacquisitions that are a good, strategic, financial, operational and cultural fit.Secondly, to consider increasing our dividend over time. Thirdly, to repurchasestock when it makes sense to do so. In the pursuance thereof, during the fourthquarter we have repurchased more than 448,000 shares at an average price of$40.31 per share, for a total cost of $18.1 million. For the year werepurchased 1.1 million shares at an average price of $39.37 and a total costof $43.3 million. Yesterday the Board declared the regular quarterly dividend of$0.15 per share for a total outlay of $6.2 million.

For 2007, the total dividendspaid were $23.2 million, a 6.1% increase over 2006 and a payout ratio of 32%.We continue to look at several types of acquisitions, from traditional bankingacquisitions within our footprint, to opportunities that would compliment ourpayments, technology, asset management, corporate trust and healthcare servicebusinesses. As always, we'll be disciplined and prudent in this approach.

All told, we had a good quarterand a record year. Our results were driven by sound execution, as well asinvestments we've made in our core businesses. Our associates have leveragedthese investments into higher revenue.

I'll come back to you with a fewconcluding remarks, but I would like to turn it over to Mike Hagedorn for adetailed review of our fourth quarter and full year results. Mike?

Mike Hagedorn

Thanks, Mariner, and let me addmy welcome to everyone on the call this morning. First, I'll provide a reviewof the fourth quarter and then turn to a few brief remarks regarding the fullyear. As Mariner indicated, we reported diluted EPS of $0.37 for the fourthquarter, which is flat from the same period in 2006. Higher revenue in thefourth quarter was offset by higher expenses, which were primarily driven by apre-tax accrued liability of $4.6 million related to Visa's covered litigationprovision.

As Mariner mentioned, withoutthis expense our EPS would have been $0.43, a 16.3% increase. Net interestincome for the quarter increased $2.2 million in 2007 over 2006, due primarilyto higher average earning assets and improved net interest margin.

Net interest margin increased 14basis points to 3.55% for the quarter, from 3.41% in the same period of 2006.This improvement came primarily from a 4 basis point increase in our earningasset yield, and a 16 basis point decrease in the cost of interest bearingliabilities.

Net interest income benefitedmodestly, as we had $174.7 million roll off of our core investment portfolio atan average yield of 4.58%, and we purchased $235.7 million of securities at anaverage yield of 4.98%.

The fourth quarter purchases arelarger than the roll off due to the pre-buying of maturities, as well as therepositioning of our portfolio mix as we swapped approximately $30 million intreasuries for agency CMOs.

As of December 31st, our publicfund balances, including the seasonal inflows, amounted to approximately $1.7billion, inline with our expectations. These funds are primarily held in higheryielding transaction accounts and repurchase agreements, and are largelyindexed.

Typically, we see a greaterimpact on our margin in January through March, as a result of the seasonalpublic fund balances, and we expect this trend to hold through again. We expectpublic funds to start declining in late January, with the majority of theseasonal balances gone by the end of March. In 2008, $615 million in coreportfolio securities should roll off at an average yield of 4.58%, of which$182 million will roll off in the first quarter at the rate of 4.56%.

In addition, approximately 63% ofour loan portfolio is expected to re-price during 2008. If rates stay atcurrent levels, or continue to decline, we anticipate a negative impact tointerest income as a result of this repricing. The magnitude of this impactwill be largely dependant on the Fed policy decisions and market movements.

Non-interest income increased to$7.9 million or 12.1%, for the fourth quarter, compared with the same period in2006, due primarily to higher trust and securities processing income, anddeposit service charges. Trust and securities processing fees were up 19.2%, andservice charges on deposits were up 8.3% primarily due to fee increases or feechanges implemented by our consumer services division. Non-interest expenseincreased to $11.3 million or 11.4%, for the fourth quarter of 2007, comparedwith 2006. With the most significant increases in salaries, employee benefits,equipment, occupancy and processing. Without the charge related to the Visacovered litigation provision, non-interest expense would have risen 6.7% forthe quarter. Visa accounted for slightly more than 40% of the increase to 11.4%.

Other drivers of the increase innon-interest expense, were higher salaries and benefit costs, which were up$4.3 million in the fourth quarter over the same period in 2006. Much of thisincrease was due to higher base salaries, increased commissions, and bonusesrelated to our improved financial performance for the year. A portion of theincrease in the fourth quarter was $700,000 related to the increase weannounced in profit sharing.

Given the current marketconditions our credit quality metrics remains strong compared to the industryand historical trends. As of December 31, 2007, non-performing loans—includingnon-accrual, restructured, and 90 days past due loans— were $9.5 million or0.24% of loans, compared to $9.3 million or 0.25% last year.

Net loan charge offs for the yearcontinue to be stable totaling $8.3 million for 2007 or 0.21% of average loans,compared with $7 million or 0.20% of average loans last year. Net charge-offsfor the quarter increased to $3.2 million, from $400,000 in recoveries in thesame period last year. The higher net charge-offs in the fourth quarter wereprimarily due to one C&I loan charge-off.

Our allowance for loan losses tototal loan ratio stood at 1.17% as of December 31, compared to 1.20% last year.We determine our provision by using a model that estimates a range of inherentrisk in our loan portfolio. Given the current market liquidity and credit conditionswe deem it prudent to be on the high side of this range.

Turning to the full year, wereported earnings for 2007 of $74.2 million, or $1.77 per diluted share. This represents an increase of 26.4% comparedto 2006 earnings of $59.8 million or $1.40 per share. During the year twosignificant events occurred that impacted our earnings. The sale of oursecurities transfer product, and the Visa's covered litigation provision.Without these two events our EPS would have been $1.74, up 24.3% over 2006.

Net interest income for 2007increased $14.9 million or 7.1% compared to 2006. This was due primarily tohigher average earning assets and an increased in net interest margin. Netinterest margin was 3.44% in 2007 compared to 3.38% in 2006. Non-interestincome increased $33.8 million or 13.3% over 2006, due primarily to higherassets under management, corporate trust fees, and deposit service charges.Non-interest expense increased to $25.7 million or 6.8%, due primarily to anincrease in salary and benefits, as well as the $4.6 million related to theVisa covered litigation provision.

Turning to the balance sheet, ourstrong financial performance for the year was driven primarily by loan growth.At the end of December, loan balances were $3.9 billion, compared with $3.8billion, a year ago. Total average loans for the year grew by 9%. At the end ofDecember, total deposits were $6.6 billion, compared with $6.3 billion a yearago, a 3.8% increase. The majority of the increase came from time deposits,which increased 9.2% in 2007.

Our average loan to deposit ratiofor 2007 was 68.3%, up from 65.2% in 2006. This growth combined with our yieldenhancement strategy resulted in healthy net interest income in 2007. For 2008,we expect this ratio to stabilize as a result of the significant run off in ourindirect loan portfolio. Return on average equity and return on average assetsduring 2007 were 8.49% and 0.93% respectively, compared to 7.09% and 0.79% for2006.

We are pleased with these resultsas they are indicators of our continued progress. Capital ratios remain strongduring 2007. Tier 1, total capital, and leverage ratios at 13.74%, 14.58% and 9.63%respectively. With that, I'll turn it over to Peter for some additionalcomments on our operating performance.

Peter DeSilva

Thanks, Mike, and good morningeveryone. I'd like to spend a few minutes providing some additional details onour operational strategies. First; let me comment on our strategy to strengthenour asset management business. Total assets under management increased 8.6% to$11 billion from $10.1 billion at the end of 2006. Leading this growth is our ProprietaryFamily Mutual Funds, which continue to play a key role in this success. Totalassets in the UMB Scout Funds increased 16.4% from $5 billion at the end 2006to $5.8 billion at the end of 2007.

And our UMB scout fundsleadership continues to be recognized by the industry. Jim Moffett manager ofthe UMB Scout International Fund finished as the runner-up in Morningstar's2007 International Manager of the year contest, for the second time in threeyears. We are very proud of Jim's accomplishments and, in fact, Morningstar'sChristine Benz commented in their follow-up article, "Moffett was also therunner-up for our International Stock Fund Manager of the year in 2005 and heis likely to remain a contender or become a winner in the years ahead." Ipersonally want to say congratulations to Jim and our entire internationalteam.

We continue to leverage ourtalent with the fourth quarter launch of the UMB Scout International DiscoveryFund. This fund invests in small and mid-size companies in various countriesand has a goal of long term capital appreciation. This fund will be managed byJim Moffett and Michael Stack, two veterans in managing international funds.

Finally we launched a newmarketing campaign in Kansas Cityto raise brand awareness of our international and small cap funds. In 2007,Corporate Trust was the key driver within our asset management division.Corporate Trust's noninterest income increase was nearly $2.5 million or 20%over 2006. In the fourth quarter's Corporate Trust rankings released by ThomsonFinancial, UMB ranked fourth for the year by number of transactions of overallmunicipal trusteeships and paying agencies combined.

Our 2007 performance against muchlarger competition is a reflection of our strong reputation and superiorcustomer service. We remain encouraged with the opportunities for growth inthis segment, both organically and through potential acquisitions.

Another important part of ourasset management strategy is the implementation of a customer focused wealthmanagement business model. We are encouraged by the results from theintegration of our wealth management product and service offerings we initiatedmore than a year ago.

With top client managers, privatebanking has more than 47 million homes and nearly $136 million in deposits. UMBFinancial Services, our full service brokerage subsidiary was another strongperformer this year, contributing $1.8 million to the year's fee income growth.

Our current businesses continueto perform well. A key driver has been our commercial card program. Commercialcard holder volume increased 22.6% in 2007. The opportunity continues to beencouraging as our commercial card holder volume posted a monthly record threedifferent times this year.

In an environment of decliningcredit scores, we continue to write all of our credit card products at a veryhigh level. We closely monitored credit scores of the entire portfolio. Ourunderwriting standards remain strong, and our portfolio continues to scoreabove industry standards.

UMB also continued to gainmomentum in Healthcare Services. At the end of 2006, we had approximately433,000 accounts, and as of the end of 2007 we have more than 794,000 accounts,an 83.4% increase. In the fourth quarter alone, we added more than 260,000accounts. Total deposits and mutual fund assets were up 53.2% for the year andnow exceed $100 million. These numbers are indicative of the tremendous growthpotential in this business.

Typically we see large accountgrowth in the fourth quarter as companies have their annual enrollment processfor benefits, which tends to drive a large increase in accounts. We continue tosee opportunity as many of the newly acquired customers began to increase theirbalances and withdraw for their healthcare needs using our multipurpose debitcards.

UMB Investment Services groupcontinues to be a solid performer. Non-interest income for the year increased15.9% over 2006. We made several key hires to strengthen the leadership teamand acquire several new clients.

In addition to growing our feebusinesses, we continue to focus on improving operating efficiencies. During2007 average loans per FTE increased 10.7% to $1.15 million, and averagedeposits for FTE increased 5.8% to $1.68 million. A non-interest income for FTEincreased a healthy 15.1% to nearly $85,000.

At the end of the fourth quarter,we had 3357 FTEs or 75 more pure FTEs than in the same period last year. Our2007 efficiency ratio improved to 76.3% from 78.95% during all of 2006. Overthe past few years, our focus on accountability and disciplinary expenses hasallowed us to reduce our efficiency ratio from 83.5% in 2004 to our currentlevel. Although we are pleased with the improvement, we recognize there arestill opportunities for further improvement and remain focused on this area.

With that let me turn it back to Marinerfor some concluding remarks. Mariner,

Mariner Kemper

Thanks Peter. I will end today'sconference call by reminding everyone that 2007 was a great year for UMB, withboth record revenue and net earnings. I truly like to thank our associates fortheir hard work and dedication in helping us to achieve this for ourshareholders.

If the past few months are anindication of what 2008 holds, for the economy and the financial servicesindustry, it will no doubt continue to be a bumpy ride for this sector. In challengingtimes we plan to run our company as always, without deviating from our timetested model and traditional of quality, liquidity and capital strength.

With that I’ll turn it over tothe conference call operator for any questions.

Question-and-Answer Session

Operator

(Operator Instructions). Thefirst question comes from the line Peyton Green with FTN Midwest Securities.Please go ahead.

Peyton Green - FTN Midwest Securities

Good morning. Michael, I waswondering if you could talk a little bit about the Fed rate cut yesterday andwhat effect that might have on the balance sheet, and what actions you mighttake to counteract it?

Mike Hagedorn

Good morning Peyton. I think it’sclear that people weren’t expecting a 75 basis point cut and especially offcycle, not during the normal meeting time. So with that said, we’re preparingfor Fed cuts on our deposit cost previous to yesterdays announcement, albeitnot 75 basis points. Clearly its going to reduce interest income. Whether itreduces interest margin or not remains to be seen as we try to make cuts to ourinterest bearing liabilities, and obviously become, I think, a little lessdependent on repo income going forward. This especially applies once the Fed orthe public fund dollars work their way through the balance sheet, and they’llprobably be off by March.

So I think the question reallyremains to be seen as far as how much can we do no the liability side, in orderto offset what's obviously going to reduce interest income going forward.

Peyton Green - FTN Midwest Securities

To what degree does your C&Ibook, or real estate loan book reprice overnight?

Mariner Kemper

It does not re-price overnight. Wedid talk about little more than 65% of our total loan portfolio, I think it's68%.

Mike Hagedorn

63%.

Mariner Kemper

63%, close within a year. So itdoes not reprice overnight. There will be a lag impact. Many of the loans aretied to various indexes, and it will take time for those indexes, and there-pricing characteristics, whether it'd be 30-day or 90-day T-bill, as theywork their self through the system.

Peyton Green - FTN Midwest Securities

Okay. And then separately, thepersonnel expense line was up about 9% year-over-year in the fourth quarter,and I was just wondering if you could indicate what portion of that was for HRkind of plans, and how much of it was related to salary increases or bonusaccruals?

Mariner Kemper

Yeah, I remember in the fourthquarter we have the full year impact, because you're comparing that to thefourth quarter of 2006, so you have the full year impact of salary increasesthat were planned in 2007, so that's part of it.

We also talk about the fact, andwe did talk about the fact, that we had an increase in our profit sharingaccrual, that was another $700,000 in the fourth quarter. We have somecommission and bonuses programs related to higher performance, and this yearthat has gone up as well.

Peyton Green - FTN Midwest Securities

Okay.

Mariner Kemper

That's a bigger driver thannormal because of commissions.

Peyton Green - FTN Midwest Securities

Correct.

Mariner Kemper

Yes.

Peyton Green - FTN Midwest Securities

Okay, great. And then if youcould comment on the credit card announcement which you made yesterday to kindof spur the growth of the credit card unit. Also, what are your expectations,is that more just on the consumer side, or is that also commercial?

Mariner Kemper

That's mostly consumer and it'ssort of an offering enhancement. It's a technology company that that we areassociated with, that announcement, and it allows us to customize the card onan individual basis. So, it's just an enhancement of the card offering at theretail level.

Peyton Green - FTN Midwest Securities

Okay.

Mariner Kemper

If you want to go any further(inaudible) it's for some image capabilities, customers can download images onto the card and there's a bunch of other features. It's mainly an enhancementat the technology level.

Peyton Green - FTN Midwest Securities

In terms of your service chargeson deposit accounts, with the Fed cutting so aggressively, does that help you froman earnings credit prospective?

Mariner Kemper

Yes, it clearly does. Your timingis good we actually met on this yesterday. We were taking a look at what thoserates currently are and what they are going to be, on a going forward basis,given yesterday's action. Yes, that would help, especially on the commercialside.

Peyton Green - FTN Midwest Securities

Good enough. And then are youseeing any signs of increased stress in any particular regions right now to addto your footprint?

Peter deSilva

They are all relativelyconsistent. We're watching all of them very, very closely right now, but as youknow the Midwest portion of our market, whichis where we live and breathe, didn't suppress some of the excesses that thecoasts and other parts of the country did. It is not something that we'reparticularly worried about, although it's something we're watching verycarefully.

Peyton Green - FTN Midwest Securities

Okay great. And then lastquestion Michael. In terms of the seasonal deposit, it's the normal kind of 7to 10 basis point drop in the margin between fourth and first quarter. Do youthink that is relevant to the whole tier, or is there anything unusual aboutthe flows this year?

Mike Hagedorn

There's nothing unusual about theflows, but remember these are indexed accounts and so they are going to repricegiven what happened yesterday.

Peyton Green - FTN Midwest Securities

Okay. All right.

Mariner Kemper

Peyton, this is Mariner. I wouldlike to correct something. We are making two different announcements on the creditcard side and Fintura, which is the release you are talking about. I wasn'tsure which one you were talking about. It's still a technology play. Largely,it's a company that helps credit card operations. They model portfolios andhelp with profitability and modeling. So two different announcements, so I amsorry I didn't know which one you were talking about.

Peyton Green - FTN Midwest Securities

Okay. Great. Thank you.

Operator

Thank you. (OperatorInstructions). At this time there are no further questions, I would like toturn it over back to Begonya Klumb. Please go ahead.

Begonya Klumb

Thank you very much for yourinterest in UMB. The call can be accessed via replay at our website beginningin about two hours and it will run through February 6th. And as always, you cancontact me at UMB Investor Relations with any follow-up questions by calling816-860-7906. Again, we appreciate your interest and time.

Operator

Thank you. Ladies and gentlemen,this does conclude today's conference. Thank you for your participation. Again,if you would like to listen to a replay of today's conference call, you candial 303-590-3000 or toll free 1-800-405-2236 and you can access that by usingthe code 11104690 followed by the "#" sign. Thank you for using ACTTeleconferencing. You may now disconnect and have a pleasant day.

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