Good morning, and welcome to the Community Bank System fourth quarter 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note that this presentation contains forward-looking statements within the provisions of the Private Securities Litigation Reform Act of 1995 and that are based on current expectations, estimates, and projections about the industry, markets, and economic environment in which the company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the company's annual report in Form 10-K filed with the Securities and Exchange Commission. Today's call presenters are Mark Tryniski, President and Chief Executive Officer, and Joseph Sutaris, Executive Vice President and Chief Financial Officer. They will be joined by Joseph Serbun, Executive Vice President and Chief Banking Officer for the question and answer session. Gentlemen, you may begin. Thank you, Chad. Good morning, everyone, and thank you for joining our year-end conference call. We hope everyone is well. Earnings for the quarter were very good and right in line with our expectations. We delivered record revenues and nearly record PPNR per share, which was up 6% over the 2020 quarter. Joe will comment further on the quarter, but I would like to add that ex PPP, we had solid growth in both our commercial and our retail portfolios, which were up 8% annualized for both Q3 and Q4. Looking at the whole of 2021, we had a really good year. Obviously, the results were favorably impacted by reserve releases and PPP. Carving those out, we still delivered solid earnings and absorbed nearly all of the margin erosion, which has not been insignificant. Deposit growth for the year was 15%, with both customer count and average balances contributing. Loan growth for the entire year, ex PPP, was 5%, with commercial flat, and consumer up 8%. The strength of our financial services businesses continues. For the year, revenues were up 12% and pre-tax earnings up 20% over 2020, resulting in significant margin expansion. Also during the year, we closed on two benefits acquisitions and five smaller insurance businesses. The acquisition of Elmira Savings Bank we announced in September is progressing well, and we expect to close on that transaction in Q2. Elmira is a $650 million asset bank with 12 offices across the Southern Tier and Finger Lakes regions of New York State. It's a very nice franchise with a very good mortgage business that we expect will be $0.15 per share accretive on a full year basis, excluding acquisition expenses. A very productive low risk transaction. Looking ahead to the remainder of the year, we have significant energy and operating momentum right now in both our banking and non-banking businesses. Margin continues to be a headwind, but earning asset growth, the strength of our financial services businesses and credit are tailwinds. We have begun to focus and invest in our commercial and retail businesses to improve organic execution to include people, systems and products. We will continue to invest in our digital channels and rationalize our analog channels as we did this year with the consolidation of 15 retail branches. Organic execution in our non-banking businesses has been tremendous, but we will continue to look to acquisition opportunity as well to grow the product breadth, talent, revenue, and earning strength of those businesses. Given the recent and expected ongoing challenges to the banking industry, we are hopeful to have a high value acquisition opportunity this year as well. We are very much looking forward to 2022. Joe? Thank you, Mark, and good morning, everyone. As Mark noted, the fourth quarter results were solid with fully diluted GAAP earnings per share of $0.80. The GAAP earnings results were $0.06 per share or 7.7% below the fourth quarter 2020 GAAP earnings and $0.03 per share or 3.6% below linked third quarter results. Fully diluted operating earnings per share, which excludes acquisition related expenses and other non-operating revenues and expenses, were $0.81 for the quarter, $0.04 per share or 4.77% below the prior year's fourth quarter and $0.02 per share or 2.4% below linked third quarter results. The decrease in operating earnings per share were driven by increases in the provision for credit losses, operating expenses, income taxes, and fully diluted shares outstanding, offset in part by increases in net interest income and non-interest revenues between comparable quarters. The company reported a $2.2 million provision for credit losses in the fourth quarter of 2021 as compared to a $3.1 million net benefit in the provision for credit losses in the fourth quarter of 2020. Adjusted pre-tax, pre-provision net revenue per share, which excludes the provision for credit losses, acquisition related expenses, and other non-operating revenues and expenses and income taxes, was $0.9 in the fourth quarter of 2021 as compared to $0.3 a year prior and $0.4 in the linked third quarter. On a full year basis, the company recorded fully diluted GAAP and operating earnings per share of $3.48 and $3.49 respectively. These were up $0.40 per share or 13% and $0.25 per share or 7.7% respectively over 2020 results. Full year 2021 adjusted pre-tax, pre-provision net revenue per share of $4.28 was up $0.02 per share over 2020 results. The company recorded total revenues of $159.7 million in the fourth quarter of 2021, a new quarterly record for the company, a $9 million or 6% increase over the prior year's fourth quarter. The increase in total revenues between the periods was driven by a $2.3 million or 2.5% increase in net interest income, a $1.6 million, 11% increase in banking-related non-interest revenues, and a $5.5 million, 13.2% increase in financial services revenues, offset in part by a $0.4 million decrease in the gain on debt extinguishment. Total revenues were up $2.8 million or 1.8% from third quarter 2021 results driven by a $3.1 million or 3.4% increase in net interest income. Total non-interest revenues accounted for 40% of the company's total revenues in the fourth quarter. The company's net interest income increased $2.3 million or 2.5% over the same quarter last year despite a significant decrease in its net interest margin. The company's tax equivalent net interest margin for the fourth quarter of 2021 was 2.74% as compared to 3.05% one year prior, a 31 basis point decrease between the periods. Comparatively, the company's tax equivalent net interest margin for the third quarter of 2021 was also 2.74%. Although net interest margin results remain below the pre-pandemic levels, the company's fourth quarter net interest income expanded over the prior year's fourth quarter and linked third quarter results driven by non-PPP related organic loan growth, the deployment of excess liquidity from low yield cash equivalents to higher yield investment securities, earning asset growth, and the reclassification of several large business lending relationships from non-accrual to accruing status. The company's tax equivalent yield on earning assets was 2.83% in the fourth quarter of 2021, matching third quarter results, and 3.18% in the prior year's fourth quarter. During the fourth quarter of 2021, the company recognized $3.6 million of PPP related interest income, including $3.3 million of net deferred loan fees. This compares to $3.5 million of PPP related interest income recognized in the same quarter last year and $4.3 million in the linked third quarter of 2021. The company recognized $18.7 million of PPP related interest income in 2021. The company's total cost of deposits remained low, averaging eight basis points during the fourth quarter of 2021. Employee Benefit Services revenues for the fourth quarter of 2021 were $30.4 million, $3.7 million or 13.7% higher than the fourth quarter of 2020. The improvement in revenues was driven by increases in employee benefit trust and custodial fees as well as incremental revenues from the third quarter acquisition of Fringe Benefits Design of Minnesota. Wealth management revenues for the fourth quarter of 2021 were $8.5 million, up from $7.5 million in the fourth quarter of 2020. The $1 million or 13.4% increase in wealth management revenues was primarily driven by increases in investment management and trust services revenues. Insurance services revenues of $8.5 million were up $0.9 million or 11.2% over the prior year's fourth quarter, driven by organic growth factors in the third quarter acquisition of a Boston-based specialty lines insurance practice. Banking non-interest revenues increased $1.6 million or 11% from $15 million in the fourth quarter of 2020 to $16.6 million in the fourth quarter of 2021. This was driven by a $1.2 million increase in mortgage banking income and a $0.5 million or 3% increase in deposit service and other banking fees. During the fourth quarter of 2021, the company reported a provision for credit losses of $2.2 million. This compares to a $3.1 million net benefit in the provision for credit losses reported in the fourth quarter of 2020. The company reported net loan charge-offs of $1.7 million or annualized nine basis points of average loans outstanding during the fourth quarter of 2021 as compared to net charge-offs of $1.3 million or annualized seven basis points of average loans outstanding for the fourth quarter of 2020. Although economic forecasts remained generally stable during the fourth quarter of 2021 despite the rapid spread of the COVID Omicron variant, the company's allowance for credit losses increased $0.4 million reflective of a $165.3 million increase in non-PPP loans outstanding and other qualitative factors. Comparatively, in the fourth quarter of 2020, economic forecasts had improved significantly from the prior quarter, resulting in a release of credit reserves in the quarter. On a full year basis, the company reported $2.8 million in net charge-offs or four basis points of average loans outstanding during 2021 as compared to $5 million in net loan charge-offs or seven basis points of average loans outstanding during 2020. On a full year basis, the company reported an $8.8 million net benefit in the provision for credit losses as the economic outlook and the loan portfolio's asset quality profile both steadily improved. The company reported $100.9 million of total operating expenses in the fourth quarter of 2021 compared to $95 million of total operating expenses in the prior year's fourth quarter. The $5.9 million or 6.2% increase in operating expenses was primarily attributable to a $4.9 million or 8.5% increase in salaries and employee benefits driven by increases in merit and incentive-related employee wages, staffing increases due to recent acquisitions, higher payroll taxes, including increases in state-related unemployment taxes and higher employee benefit-related expenses. Acquisition-related expenses were also up $0.4 million between the comparable annual quarters due to the pending Elmira Savings Bank acquisition and other recent financial services acquisitions. The effective tax rate for the fourth quarter of 2021 was 23% and 21.4% on a full year basis, up from 20.9% and 20.1% respectively from the equivalent prior year periods. The increase in the effective tax rate was primarily attributable to an increase in certain state income taxes that were enacted through the periods and a decrease in the proportionate tax-exempt revenues in relation to total revenues. The company crossed $15.5 billion in total assets during the fourth quarter, driven by the continued inflows of deposits, which increased $187.3 million, or 1.5% from the end of the third quarter. Ending loans at December 31st, 2021 were $7.37 billion, $91.1 million, or 1.3% higher than the third quarter of 2021 ending loans of $7.28 billion, $42.3 million, or 0.6% lower than one year prior. Excluding PPP loan activity, ending loans increased $165.3 million or 2.3% during the fourth quarter of 2021, and $334.5 million, or 4.8% on a full year basis. Loans outstanding net of PPP loans have grown organically by more than 2% in both the third and fourth quarters of 2021. As of December 31st, 2021, the company's business lending portfolio includes 722 PPP loans with a total balance of $87.9 million. The company expects to recognize the majority of its remaining net deferred PPP fees totaling $3.1 million over the first and second quarters of 2022. Although the company's low yielding cash equivalents remained elevated, totaling $1.72 billion at December 31st, 2021, the company deployed a significant portion of its excess liquidity during the fourth quarter by purchasing $668 million of investment securities at a weighted average purchase yield of 1.41%. These activities continued in January with the purchase of an additional $757.6 million of investment securities at a weighted average purchase yield of 1.56%. The company's capital ratios remained strong in the fourth quarter. The company's tier one leverage ratio was 9.09% at December 31st, 2021, which is nearly 2x the well-capitalized regulatory standard of 5%. While the net tangible equity to net tangible assets ratio was 8.69% at December 31st, 2021. The company has an abundance of liquidity. The combination of the company's cash equivalents, borrowing available at the Federal Reserve Bank, borrowing capacity at the Federal Home Loan Bank, and unpledged available for sale investment securities portfolio provided the company with $6.63 billion of immediately available sources of liquidity at the end of the fourth quarter. At December 31st, 2021, the company's allowance for credit losses totaled $49.9 million, or 0.68% of total loans outstanding. This compares to $49.5 million and 0.68% of total loans outstanding at the end of the third quarter of 2021, and $60.9 million, or 0.82% of total loans outstanding at December 31st, 2020. The $0.4 million increase in the allowance for credit losses during the fourth quarter is reflective of non-PPP related loan growth and other qualitative factors. Non-performing loans decreased in the fourth quarter to $45.5 million, or 0.62% of loans outstanding, down from $67.8 million, or 0.93% of loans outstanding at the end of the linked third quarter of 2021. At $76.9 million, or 1.04% at the end of the fourth quarter of 2020. The significant decrease in non-performing loans during the fourth quarter is primarily due to the reclassification of certain hotel loans from non-accrual status to accruing status. Loans 30-89 days delinquent totaled 0.38% of total loans outstanding at December 31st, 2021. This compares to 0.47% one year prior, and 0.35% at the end of the linked third quarter. We believe that the company's asset quality remains strong, but acknowledge that the historically low levels of net charge-offs experienced in 2021, in a generally benign credit environment were supported by the extraordinary federal and state government financial assistance provided to businesses and consumers throughout the pandemic. Looking forward, we are encouraged by the momentum in our business. The company generated solid organic loan growth in 2021, especially in the third and fourth quarters. The financial services businesses have been growing and performing very well. Asset quality remains strong. We've been active in deploying our excess liquidity as interest rates have climbed in recent weeks. In 2022, we will remain focused on new loan generation. We'll continue to monitor market conditions to seek additional opportunities to deploy excess liquidity. Lastly, to echo Mark's comments, we are pleased and excited to be partnering with Elmira Savings Bank. Elmira has been serving its communities for 150 years, and we will enhance our presence in five counties in New York, Southern Tier, and Finger Lakes Region. We initially anticipated completing the acquisition in late first quarter of 2022, but now expect to close in the second quarter of 2022. The integration efforts are going very well, and we sincerely appreciate the efforts of our colleagues at Elmira Savings Bank to make the transition as seamless as possible for its customers. Thank you. I will now turn it back to Chad to open the line for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, you may press star then two. At this time, we will pause momentarily to assemble our roster. The first question will be from Alexander Twerdahl from Piper Sandler. Please go ahead. Good morning, guys. Morning, Alex. First off, I was hoping that you could appreciate your comments on the investments that you're putting into the commercial and retail lending team. I was hoping you could comment a little bit on the pipelines going into the beginning or the sustainability of that 2%+ overall organic loan growth over the next couple of quarters. Alex, Joe Serbun. I'll take that. I'll give you the commercial pipeline. I'll also give you the resi mortgage pipeline as well. The pipeline for 2021, December 2021 ended at $348 million. Excuse me, $335 million. As compared to December 2020, which was at $136 million. Then the anticipated fundings, right? Loans that have been approved but not yet funded. For 2021, it's $348 million. For 2020, it was $212 million. It is across all of the regions. Some more than others, but everybody seems to be participating in the activity. Much of that's coming by way of CRE or multifamily, some self-storage kind of activity, C&I activity. A variety of lending opportunities. On the consumer side, the resi mortgage pipeline's at $141, which is a little lighter than where we were the same time last year at $165, but I'm not concerned. That's more of a reflection of our improved process. We're getting things through the pipe and through the funnel faster, which therefore I'm not surprised that we're not at the 160+. Our number of days that we're turning things through are improving, so I feel real comfortable with the activity in the resi pipeline as well. Great. Then can you comment a little bit on the blended yields on new loans? Was there some in the fourth quarter re-recognition of interest that from those loans that were on nonaccrual that returned to performing status? Alex, this is Joe Sutaris. I can take that question. The blended yield of new volume in the fourth quarter was about 3.30%, give or take. You know, with our blended current book yield, excluding PPP in the fourth quarter of about 4%. We are putting new loans on at rates below the existing yields. Obviously, you know, the volume and growth has been very good in the last couple of quarters. We're putting new volume on at 3.30%. With respect to the nonaccrual loans that moved to accrual status during the quarter, we booked approximately $1 million of interest income related to, you know, to those loans moving from nonaccrual status to accrual status in the quarter. Great. Just a final question. As it relates to the liquidity deployment, you know, how do you think about that? Is it in terms of sort of a target liquidity level or deposit balances, or you just look to see where the loan growth shakes out and then sort of sop up the rest with security balances? Or, you know, maybe give us a sense. I know you said that you did some purchases in January, but kind of how should we think about the pace of liquidity deployment over the next couple quarters? Yeah. We still have some modest amount of, I'll call them open strategies for, you know, some of the terms that we'd like to hit in the securities portfolio. You know, if we stay at those levels, I think it's fair to expect another, call it, you know, $500 billion or so to be invested over the first part of the year. But to your point, yes, we'll be monitoring the loan portfolios as well, to you know to see what the growth expectations are there and obviously, you know, monitoring where the rate curve is going as well. What we're really trying to target, Alex, is also to build a nice cash flow ladder on the securities portfolio, going out into future periods. If there are other opportunities, you know, when and if rates, you know, stay higher or move higher, we'll have opportunities to reinvest some of those, you know, on a going forward basis. We probably will maintain some, you know, some levels of liquidity, continue to maintain, you know, higher levels than we have certainly pre-pandemic. We're also looking to deploy, you know, continue to deploy some of the additional liquidity, you know, in the first half of the year. Great. Thanks for taking my questions. You're welcome. The next question will be from Russell Gunther from D.A. Davidson. Please go ahead. Hi. Good morning, guys. I just had a quick follow-up on the growth conversation. Appreciate the pipelines that were provided. As was mentioned, really strong growth in the back half of the year. Could you give us a sense for what your organic growth expectation is for 2022 and what some of the asset class drivers would be? Just particularly curious as to, you know, thoughts around retaining single family at the current point. Russell, I'll take that. It's Joe Serbun. Excuse me. So the overall expectations are that we're gonna grow in the mid-single digits overall. The expectation on the commercial side is that we will grow. I mentioned some of the asset classes earlier that we are focused on and have been focused on. Then on the two retail products or two retail lines, the installment loan, or more importantly, the indirect loans, as well as the resi mortgages, we expect them to continue to grow but probably at a slower pace than they have historically. You know, we have some inventory challenges with houses and cars and of course, the anticipated rate hikes and what kind of headwinds they may provide us. That's what we expect for overall growth and portfolio growth. We do expect to retain our mortgages on the balance sheet. I would just add, Russell, it's Mark. Hey. Hi, Mark. Russell, it's Mark. Hi. I just wanted to add, I did, in my prepared comments, said that we've kind of begun to focus and invest in our commercial and our retail businesses to improve organic execution, to include people, systems, and products. We are, you know, investing in our mortgage business in different ways around products, around people, around our model, our mortgage model, which has always been more branch-oriented and less, you know, mortgage originator focused. We're gonna reposition that a bit. We are also investing in our commercial business in different ways in some of the markets that we're already in with improved resources. Also, pursuing other adjacent, you know, markets that have superior, you know, growth potential characteristics relative to our existing markets. We are making an effort this year to, you know, to do a better job, and grow better over time by investing in our organic execution ability. Joe had mentioned the days to close on the mortgage side. You know, we've added some resources to our mortgage business in the back office to try to keep that, you know, those days down. Because in anticipation of, you know, some of these investments that we're making in the mortgage business around people and our model, we expect more throughput. We're gonna need to have more back room capabilities, which we've already started to ramp up a bit. That explains, as Joe said, why the, you know, the pipeline's down, but the average days to close is also down. We're getting through the funnel quicker. Just wanted to follow up with that comment on the investment we're gonna be making across our commercial and mortgage business here in 2022. I appreciate it, Mark. Thank you both for the follow-up thoughts there. You know, switching gears to the margin that you mentioned in prepared remarks remains a headwind. You guys detailed the kind of new money yield versus what's coming off. I'm curious how you balance that with what the Fed might do and the impact of rate hikes on your outlook. Could you share kind of what you're expecting from a Fed rate hike perspective and how each 25 basis points might impact the margin or NII? However you guys want to take a crack at that. Thank you. Yeah. Russell, this is Joe Sutaris. I'll take a shot at that. On a full year basis, between variable rate loans and loans that effectively are or pay principal payments and prepayments of loans, we expect a little over $2 billion, $2-$2.5 billion of, I'll call it repricing opportunity, in, you know, on a full year basis. You know, when and if the Fed does raise rates, and I think we're kind of in the camp of everyone else, which is, you know, we could see three rate hikes this year, maybe some more in 2023. You know, we'll have the opportunity to climb the curve if the long end goes up or the middle part of the curve goes up a bit, just because that's where most of our new loan generation is priced. Obviously, we have you know, some variable rate loans that will immediately lift off the floors, most of them. You know, in the next 12 months on the variable rate loan side, we have about $850 million that we expect to reprice in the next 12 months and another about $800 million in 2023 in the variable portfolio. I think we're gonna have you know, some opportunities to you know, to expand margin when and if rates do go up, and we are asset sensitive. I'll also remind you that, and the group that, you know, our deposit beta in the last several cycles, I think back to the 2015-2018 cycle, was very close to 0 for most of the cycles. You know, when and if rates go up, we would expect the margin outcome to get a bit better for us. Great. Thank you, Joe. I appreciate it. Just last one, switching gears, would appreciate your guys' thoughts on the revenue growth outlook within the employee benefits line and, the trends and activity you're seeing for 2022. I'll step back. Thank you. Yeah. Well, it was double-digit growth this year. On the top line, I think it was 12%. The pre-tax earnings line was 20%. I think we also achieved that last year as well, double digits on top and bottom line. You know, every year we do that, we always say to ourselves, you know, "At what point does this, you know, slow down?" It doesn't seem to. You know, I'm optimistic we can continue to grow, you know, the top line at double digits. I think we're pretty well positioned to do that actually heading into 2022. Some of those revenues are market dependent, and so there's some impact. You know, if we get a significant slide in the market, that would impact some of those revenues. On the other hand, the insurance market's hardening, and so you're going to get, you know, that benefit from the hardening of the insurance market. You know, the benefits business. We're in a sweet spot right now in our benefits business where we have the ability to serve larger players, and some of those are very large financial services businesses which are coming to us to outsource their administration and record-keeping, trust needs. We're getting incoming opportunities of significance in that space right now, which is great. We've got some partnerships with some very large national and multinational financial services organizations that have you know come to us to help solve some of their needs and issues as well. In addition to just organic growth in that business, we're in a really good spot in terms of the scale of that business and our capacity to serve you know much larger very large national and multinational financial services firms in terms of what we do and the products and services and capabilities we have in those businesses. You know, what started as a kind of a 401(k) shop 20 years ago has evolved to something much more sophisticated and complex with incredible technology and capabilities that we're now leveraging into much larger opportunities in the marketplace. I would expect that business will grow double digits next year as well. You know, we'll keep investing in those businesses. They're great businesses. You know, the run rate this year should be about $200 million in revenues for our non-banking businesses. We think that 2022 will be also a really good year across the board. I appreciate it, Mark. Thank you all for taking my questions. Thanks, Russell. The next question will be from Matthew Breese from Stephens Inc. Please go ahead. Good morning. Hey, just going back to the rate-[crosstalk] Good morning, Matt. Sorry. Just going back to the rate discussion, I was hoping you could give us a sense for the duration of the securities book and what percentage of securities are floating rate, if any, and then the impact on, you know, just that 100 basis points net interest income sensitivity model in your 10-Q. What deposit beta are you baking in? Yeah. I'll take that, Matt. This is Joe Sutaris. The effective duration of the portfolio is just over seven years. You know, fairly well laddered. It's almost all fixed rate securities with bullet type securities, a lot of Treasury securities. We do have some MBS securities that provide a variable cash flow, but they're not variable instruments. They're just the cash flows will change over time depending on the prepayment levels. But it's, you know, I think it's fairly well laddered, so we will have some opportunities, you know, I think to reprice and purchase new securities as you know, as time passes and those run off. I'm sorry, Matt, what your second question was? Yeah. Can you repeat that? You know, in your prior comment, we discussed as a reminder, you know, for the last hiking cycle, the deposit beta was close to zero. I was curious in your 10-Q, you know, where you show the net interest income sensitivity. If behind that data, you know, are you running a 0% beta, or what are you assuming there? We have some modest beta built in, Matt, you know, as opposed to zero through the whole cycle, but it's very modest. You know, probably less than 10 in the model. You know, just based on our past experience, we have very little beta, and we would expect that to be similar for this cycle as well. I would just add that, you know, the whole industry is awash in liquidity. So, you know, from a competitive standpoint as well, I would expect that we might not be as competitive this cycle for deposits later in the cycle as it was in the last cycle. I think our ability to keep deposit rates kind of near their current levels in a, you know, in a 100 or 200 at least for a 12-month period is very reasonable. It's a reasonable expectation. Got it. Okay. You know, my next one is, you know, industry-wide, we're starting to see some particularly the larger banks change deposit service fees, mostly tied to overdraft and NSF. I think there's some fear that the CFPB could be just a little bit more impactful over the coming months and years. Just curious how you look at deposit service fees, if you feel like there's anything at risk, and if so, you know, how would you kind of outline that? Yeah. Matt, I think we're in a good position from the standpoint of our checking deposit base. You know, historically, going back, gosh, it's been about 15 years, we've been a free shop per se for our retail customers and kind of low activity charges on even our commercial businesses. You know, if we modify practices going forward for overdraft outcomes, you know, we potentially could go backwards a bit in terms of the revenue line item. But I think we also have the ability to make up some of that in other areas of deposit service fees. I feel like we're you know, fairly well-positioned. We are certainly evaluating you know, all of our offerings and looking and keeping you know, an eye on all of the you know, changes in the regulatory environment. It's certainly on our radar and you know, we expect this year we will probably make some modifications to our offerings. We also think we're well-positioned. You know, we're aware of some other institutions that certainly had you know, call them monthly maintenance fees per se, and you know, overdraft fees that were you know, significant and at least we're in the position where I think our maintenance costs and activity fees are lower than some of our peers. We might have some ability to make up some of that lost revenue, as we change our product set. Great. Okay. Last one for me, just on share repurchases. You know, looking back, I can't remember if you know, in the years I've covered you, if I remember a quarter where you've actually repurchased stock. But I was hoping you could just walk through what triggered that capital deployment strategy. You know, was it valuation driven, or was it more from the standpoint that you executed on everything else, including loan growth, M&A, securities growth, things like that? Yeah, Matt, it's Mark. I'll comment on that one. I think you're right. We haven't, you know, historically bought back a lot of the stock. One of the things I've kind of wanted to do for a long time was just a, I'll call it a housekeeping or cleanup of shares issued under the employee equity program. You know, it's not a lot, but it just is a matter of housekeeping, I would call it, to clean it up. We just never got around to doing it. You know, we finally got around to doing it. We'll probably. You know, you'll see that going forward. There's really no rhyme or reason other than that. It's not some, you know, detailed scientific capital allocation strategy. It's just kind of more, you know, good hygiene. Let's clean up the share creep associated with the equity plans over time. You'll probably continue to see that into the future. Okay. Do you think we should expect that like a once a year cleanup? I think, Matt, we'd pick our spots over the year and, you know, do it in probably, you know, incremental bites, over the year. I think in effect, you know, on a full year basis, we're looking to just, you know, clean up the creep, which is, you know, 300,000-500,000 shares, depending on the year, maybe a little less. Got it. Okay, great. I appreciate you taking my questions. Thank you. Thanks, Matt. The next question will come from Chris O'Connell with KBW. Please go ahead. Hi. Good morning, gentlemen. Mike. I just wanted to start off, you know, with the expense base. You guys obviously have, you know, rationalized the branch network, you know, quite a bit over the past 12 months or so. It was just outside of the Elmira deal. I was just wondering about how much of that opportunity is left and, in general, how you think about, you know, organic expense growth into 2022. Yeah. Chris, that's a good question. Fair question. You know, our run rate the last couple of quarters on operating expenses was about $100 million. I would expect that, you know, as we look into 2022, you know, to potentially add a couple million dollars to that result. You know, certainly in Q1 and into Q2, excluding the Elmira opportunity. We tend to give our merit-based increases at the beginning of the year. We also have higher payroll taxes in the first quarter. I think you'll see most of that sort of achieved in the first quarter. You know, $2 million on top of what we did in the last couple of quarters and then sort of becomes our run rate. You know, with wage pressures, you know, we would typically have, you know, I'll call it a 3% kind of expectation around operating expenses growth. It's probably closer to 4% or 5% with, you know, certainly with wage pressures in the market. We're also investing in some loan generation resources, which will add a little bit to costs as we move ahead. You know, nothing too far out of the ordinary, just a bit higher on the expected run rate. With respect to, you know, additional opportunities to rationalize the business, I think we'll continue to look at those. They do take a little time to sort of bake into the OpEx. You know, you need to announce any sort of rationalizations and execute on them. Ultimately, you know, you realize those gains over the future periods. I'll just say that, you know, particularly the occupancy and equipment expense line item has been pretty flat the last couple of years, particularly because of some of the consolidation activities. The last thing I will note is that, you know, we continue to invest in digital technologies. You know, the expectation is that we're going to continue to do that. You know, the world is changing, and we're trying to keep pace with that change. You know, the telecommunications and IT expense line item could creep up a bit more than kind of the core run rate for expenses. But you know, call it the occupancy and those types of costs will tend to be probably below the core run rate. Great. That's helpful. Secondly, you know, you guys mentioned the prepared comments, you know, that you would be looking to do, you know, potentially another deal in the next year, if the opportunity presents itself. If you could just give a reminder of, you know, what would be the ideal size and, you know, geographical landscape or, you know, net add for, you know, loan generation capabilities, et cetera, you know, for an ideal, you know, transaction? That'd be great. Sure, Chris, it's Mark. You know, I think $1 billion-$2 billion is a good sweet spot for us, either you know, within our footprint or contiguous to our footprint. High quality franchise, good culture, not a fixer-upper, something that has you know, valuable assets that are underappreciated in the market. That could be a mortgage business, that could be wealth, which is interesting to me. If you look at some of the banks out there in that size space, at least in and around our markets, the Northeast generally, there's some really really good $1 billion-$2 billion banks with really good wealth businesses that are trading at 9x earnings. I think there's a lot of you know, opportunity. I think, you know, banks like that are gonna have a challenging time getting a multiple in the market for, you know, a variety of reasons. I think, you know, with our, you know, currency and kind of background and expertise and history of value creation for shareholders, including those who we, you know, partner with, I think there's a good, you know, opportunity in 2022 to find something that, you know, that fits that kind of ideal criteria. That's helpful color. Thank you. What about, you know, on the non-bank side, you know, within the fee businesses, can you just give us an update on, you know, you did, you know, inked a couple of smaller acquisitions here over the past couple of quarters there. Is there, you know, still good opportunities presenting themselves, or is it being a little bit priced out due to, you know, some of the entrants of, you know, PE competition in those spaces? Yeah, I think you know, the insurance space is pretty stable. I mean, that's a very, very fragmented market. You know, in that space, scale makes a difference. I think we'll continue to have opportunities in the insurance space. We've never done a lot in wealth in terms of larger acquisitions because they tend to be overly expensive, and you don't really own the assets. We're a little bit cautious in the wealth space. What we do in the wealth space is we bring on small offices, like a one or two or three, you know, three folks on the team, and they have a couple, $300 million, and we'll, you know, bring them on. It's not. You could call it an acquisition, but. We've done some of those. In fact, I think you're looking at one or two right now, you know, along those lines. Most of the stuff on the wealth side is not what you consider kind of traditional larger acquisitions. They're more smallish shops that are jumping onto our platform, and there's a you know a monetization event for them as part of that, sometimes structured as a you know sign-on bonus kind of thing. You know, in the benefits space, the couple we did last year were both negotiated transactions. They were not bid out to PE. I think, you know, we have a lot of relationships across the U.S., and in Puerto Rico. We are the largest benefits provider in the Commonwealth of Puerto Rico. We have a lot of relationships and not everybody wants to sell to PE for obvious reasons. I think we'll continue to have opportunities. I think we will probably see other opportunities where we get to go up for an asset that gets shopped to, you know, the broader world, in which case we will have a harder time, you know, beating PE just frankly based on price, unless it was really a particularly high-value asset for us for some reason. You know, we'll keep playing. We've been close a couple times. We'll see. I mean, one of the challenges, frankly, is the investment bankers for the PE firms kind of like to sell to each other. You know, they like to do business with the PE firms because there's a lot more business to do with them versus, you know, for us, where we're not, you know, quite as active. We're not in the business of buying and selling assets. The investment bankers kind of favor the PE bids. That makes it a little bit more challenging. I mean, we understand the, you know, the field of play and, you know, we do our best to play in it without, you know, being undisciplined. I think the real opportunity is gonna be focusing on those negotiated transactions where we have good relationships and good assets, as well as this opportunity to kind of reach upmarket and talk to these some of these bigger financial services players and leverage off their scale to create opportunities for us. Great. Just on the credit side, you know, it's good to see the, you know, big chunk of non-accruals, you know, coming back onto accrual this quarter. As you guys look ahead over the next, you know, quarter or two, is there any other, you know, significant chunks or kind of cliffs of those those six-month periods that are coming up here that you can see another, you know, sizeable chunk of the non-accruals kind of coming back on? Hey, Chris, this is Joe Serbun. Yeah. The 18 that we moved were the obvious ones. There's a couple others that are not of significant size. None of them are of significant size, first of all. Secondly, there's a few that didn't have, if you will, six months worth of performance underneath them that made us comfortable enough to move them from non-accrual to accrual. I think that as we go through the second quarter, we'll reevaluate them. As we go through the third quarter, we'll do the same thing. If it warrants moving them, we'll move them. There's nothing, there's no large number of assets that we're looking to move. The biggest move took place in December. Understood. Last one, just a little cleanup. How are you guys seeing the tax rate for next year? The tax rate? I think it's fair to expect somewhere between, call it 22.5% and 23.5% on a going forward basis. You know, we've had certain states that enacted you know, higher rates and so we're dealing with that. Also, if you look at the you know, balance of our earning assets, there's more assets deployed in taxable assets than there have been in the past. I would expect the rate to kind of you know, kind of hover between you know, call it 22.5% and 23.5%. Potentially a little bit lower. That's, I think, a fair expectation for 2022. Great. Thanks for taking my questions. Thanks, Chris. The next question will come from Erik Zwick from Boenning & Scattergood. Please go ahead. Thanks. Good morning, guys. Morning, Erik. Morning, Erik. Most of my questions have been answered. Just one, and I apologize if I missed it in the opening commentary. What was the driver of the decision to move the closing of Elmira to 2Q? I don't know if there's so much a decision on our part as just an expectation around where we see the trend of the regulatory approval process going. You know, we decided to push it off two months further out just based on the progress and the dialogue with the regulators. I mean, there's nothing of note or concern. I think it's just right now with the administration and the pending appointments of some of the agency leadership and the interest of all of the regulatory agencies on every single transaction, even those who have a tangential involvement. It's a lot more complicated. It's slow. Everyone knows that that's just the trend right now. We just decided to push it out a couple months to be sure. Got it. That makes sense. In what month within 2Q are you targeting at this point? We're looking at May right now. Okay. Perfect. Thanks. That's all I had today. I appreciate you taking my questions. Thanks, Erik. Thank you. Again, if you have a question, please press star then one. The next question will be from William Wallace from Raymond James. Please go ahead. Thank you. Good morning, guys. How are you? Good morning, Wally. Good. Hi, Wally. I had one follow-up question to Matt's line of questioning around deposit service fees. If I look at that line as a percentage of average core deposits, pre-COVID, you guys were running kind of 20-22 basis points per quarter. Then like the industry, that dropped once COVID hit with all the stimulus, et cetera. Yours have been kind of stubborn and not recovering like we've seen other banks. I’m curious if you’ve analyzed the trends in your deposit portfolio and if you have any expectation of what that deposit service fee line might look like moving forward through the next, you know, several quarters or couple of years. Yeah. Hi, Wally. This is Joe Sutaris. I can take that. You know, the advantage that we've had on a core funding base over a lot of years is really our core deposit base. Our ability to track demand deposits, if you will, was very strong over a long period of time. We did a lot of branch acquisitions over time that brought in good core deposit relationships. When the stimulus funds, you know, came in, most of those funds came into consumer checking accounts. Just on that basis alone, you know, our core deposit base, you know, grew substantially, probably more so than many of our peers. Those balances have continued to be substantial and high, if you will, by historical standards. So, you know, in that cycle, effectively, the you know, the number of overdraft occurrences just and other fees simply came down because the balances were higher. I would expect that, you know, as you know, assuming that there's some of that money gets spent by consumers over time and balances come down, we would be you know, kind of moving back toward a more historical path, but probably not getting back to the levels we were certainly you know, pre-COVID. As we also mentioned, you know, we are evaluating the offerings and the offerings potentially could change in 2022. You know, our expectation is that we you know do have some ability to you know potentially get some other deposit fees that are not NSF and overdraft related. Just because we've offered a free checking product suite and low you know transaction fees, if you will, over a long and extended period of time. Okay. Thank you very much. That's very helpful. One follow-up for you. I think it was Mark that was talking about the expense base, and it sounded like you were saying we're starting off the year around $102 million or so, and then you'd think that there'd be 4%-5% kind of cost of living expense on pressures on top of that. Is that? Did I interpret your commentary correctly? Yeah. William, this is Joe Sutaris. I had made that comment. We were running about $100 million in expenses the prior two quarters. Typically what we have is we have an adjustment in the first quarter because merit-based, you know, increases go through, payroll taxes kick in, FICA taxes kick in. We typically move up a bit. My expectation is that'll be, you know, a couple million dollars from Q4 to Q1. Then, you know, on a run rate basis, on a going forward basis, I think, you know, a 4%-5% expectation on an annualized basis is a more reasonable expectation. Whereas in the past, it potentially could be 2%-4%, but just obviously there's inflation in the market and there's you know various wage pressures. I think our core run rate in terms of just growth is gonna be just a little bit higher than it has been you know certainly in the past. We're also investing in you know resources to originate you know new loans and grow the loan portfolio and have better organic execution on the loan side as well. Okay. Yeah. Thank you very much for that, Joe. I appreciate it. That's all I had. Thanks, guys. No problem. Thanks, Wally. Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Tryniski for any closing remarks. No further remarks from me, Chad. Thank you. Thank you all for joining us this morning, and we will talk again after the end of the first quarter. Thank you. Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.